When the Malta Maritime Forum (MMF) was set up in 2015, two of its stated objectives were:
a) To promote the interests of the Maltese maritime sector; and
b) To promote research, education and training within the Maltese maritime sector.
The publication of this unique study is an attestation of these objectives. When MMF commissioned E Cubed Consultants to undertake this study, it aimed at raising the profile of this industry through professional research and economic analysis so that the outcome and the conclusions are based on empirical facts and shorn of any bias.
The study is unique because it is the first of its kind in Maltese economic literature albeit dealing with an activity which has shaped Malta’s very own existential dimension. The islands of Malta and Gozo would have no identity without the relativity to the sea through which the islands assume their international dimension and enable the undertaking of trading in order to survive. These facts are part of the Maltese DNA as is our mother language but like all things natural, they are generally taken for granted and not given the appreciation they deserve. This is the glass ceiling the forum wanted to challenge when embarking on this study so that both the policymaker and the public can appreciate the contribution that this activity – rather, a range of activities – makes to the national economy.
The study analyses the data for a seven-year period, 2012 to 2018, and concludes that the maritime sector generated around €853 million in value added in 2018, which translates into approximately 11,864 jobs. Adding the indirect effects, the value added increases to €1,566 million; job creation goes up to over 14,500 full-time equivalent jobs.
Another conclusion deriving from this study is that by applying different types of multipliers to the output data, the maritime industry is found to generate an economic contribution of €2,163 million and the equivalent of 20,515 jobs. The maritime industry accounts for eight per cent of the total economic value added and six per cent of the total economic gainfully occupied. The contribution to the economy’s total output has been generally on an upward trend, rising from 5.3 per cent to 7.4 per cent during the seven-year period. These conclusions are supported by statistical tables and comparative graphs which those who wish to study in more depth will find of interest.
The study also deals with the issue of productivity and observes that whereas the average value added per employee within the Maltese economy stands at €47,000, the same value added or productivity within the maritime sector stands at €72,000, i.e. 53 per cent higher than the national average. Further comments to these hard facts become superfluous.
The average growth of the value added in the economy is 10 per cent, compared to 12 per cent when it comes to the growth registered in the maritime sector.
The fourth chapter of the study deals specifically with the economic value of the maritime sector in Malta and the results deriving from the analysis undertaken warrants the full attention of the policymaker as well as of the investor. The analysis in this chapter leads to the conclusion that the average annual increase in value added generated by the maritime activities is 13 per cent, whereas the average increase in the generation of employment is six per cent.
As can be attested by the achievements in the maritime sector, which is the subject of chapter five of the study, over the years, Malta has scored a number of highs in the international maritime industry. Unfortunately, these achievements are difficult to quantify in terms of investment and return because there is no particular NACE category which encompasses the entire maritime investment activities in Malta. Hopefully, this matter will be addressed in the future.
A SWOT analysis is also undertaken in chapter six which deals with the potential of the maritime sector. This analysis is directed towards the identification of the sector’s potentials, challenges and constraints and for this reason it considers six dimensions, namely:
i) human capital;
ii) market demand;
v) logistics considerations;
vi) general business environment.
Some of the conclusions resulting from this analysis are:
The growth projections for the maritime sector are very positive and it is expected that this sector will soon make up in excess of 14 per cent of Malta’s total GDP.
Over the years, Malta has scored a number of highs in the international maritime industry
• A significant skills gap exists in this sector due to a shortage of qualified and skilled employees.
• There is a lack of infrastructural capacity.
• There is a general lack of awareness and appreciation of the maritime sector from the public.
• The industry suffers from an information gap.
The study highlights that there is also a gap in the maritime legal structures, mainly due to the absence of a maritime court as well as to the lack of sufficient recognition of the Malta Arbitration Centre.
There is no doubt that such conclusions warrant the full and undivided attention of the policymaker. The Malta Maritime Forum has long campaigned for the reintroduction of the Maritime Malta business model which was a success story in itself but which the political powers decided to abolish for political expediency. The resulting gaps that are manifest in today’s maritime sector are an attestation of this failed policy which unfortunately was introduced by one administration and retained by the current one.
The study does not stop at dry statistical analysis but it goes the extra mile to put forward recommendations by way of a proposal for a national framework for the maritime sector in Malta. It advocates that: “The development of a National Maritime Framework would sustainably enhance and develop the maritime industry while protecting the sea resource.”
The MMF looks forward to engage in an exchange of views both with its members as well as with the government and public entities for a sustainable strategy for the development of the maritime sector. Environmental considerations are paramount to ensure sustainability as well as shedding of misconceptions about maritime activities and the environment. The concept of the ‘blue economy’ is based on the harmonious balance between maritime activity and marine ecology.
This study is unique not only because of the highly-professional economic analysis undertaken by E Cubed Consultants, but also because it serves as a point of reference for the policymaker, the players within the industry and the academic researcher who wishes to delve deeper in this economic activity.
A final word of praise is reserved to Mediacoop, who were entrusted with the design and layout of the publication, and to Gutenberg Press for the high-quality printing.
Godwin Xerri, Managing director of Focal Marine and also a board member of the Malta Maritime Forum.