Stability and diversity are the hallmarks of the Maltese economy, shared Clive Brockdorff, Manager for Investment Promotion at Malta Enterprise, the national development agency tasked with promoting and facilitating international investment by offering investors business opportunities and tailored services.
From being an ancient trading hub, Malta, in recent history, served as a military outpost. Brockdorff stated that the country started to industrialise in the 1950s as the British started to divest themselves of their colonies after the second world war. “After studies done to ascertain the way forward for the Maltese economy, the authorities opted for a mixed economy.”
The Maltese economy today is diversified and supported by sectors such as ICT, advanced manufacturing, maritime and life sciences, besides tourism. The island, with its efficient regulatory framework, boasts a growing list of international clients and partners in financial services, as well.
Brockdorff pointed out that the Malta’s GDP stands at around 7bn, which seems modest until compared with its small population. “Our GDP growth is in excess of 4% which is extremely positive when compared to other EU Countries. Unemployment is low hovering around 5% and inflation is under control.”
The country’s exposure to international commerce is one of the highest worldwide. “Our main export partners are Europe but we also export a fair amount to Asia and Africa. Our target markets are very well spread out so if there is trouble in one region, the shortfall is taken up by orders from other areas. Diversifying our product line, our economy as a whole, and our markets was done very consciously from the early days. ”
According to the National Statistics Office in Malta, at the end of June 2015, the stock position of Foreign Direct Investment in Malta stood at €148.2 bn. Some prominent companies which have invested in Malta include HSBC, Microsoft, Playmobil, Uniblue, Cardinal Health, and Lufthansa Technik.
In his overview of important sectors, Brockdorff highlighted the manufacturing sector as the most important. “We have a dozen industrial estates and the manufacturing sector focuses on high value added products. Since our main limitations are labour and logistics, manufacturing small items of high value offsets those two issues, so we still remain very competitive.”
As such, the industry focuses on manufacturing components and not finished products. There are over 200 foreign owned operations in Malta and a prestigious client list that includes Airbus, Boeing, Chanel, Nokia. “The industry tends to be very knowledge based. If there is thought or design going into a product, that is where we remain competitive.”
Healthcare is another up-and-coming sector, both for the manufacture of devices as well as generic pharmaceuticals. “Malta has got a very strong generic pharmaceutical industry. Being a small market, many pharmaceutical companies do not register their patents here. So, a generics company can come to Malta and reverse engineer a particular drug, do pre-production testing and stockpile, but only sell when the patent expires. This gives generics companies a year’s advantage over their competitors and they can compete at quite high prices.”
He shared that Malta also has generics companies from Asia, such as India, who in order to sell within the EU, set up their batch release and testing laboratories in Malta. When the product is released from Malta, with appropriate certifications from the Maltese Medicines Authority, it is easily accepted in the EU market.
The ICT sector is one that has been given a boost with Malta’s connectivity to mainland Europe and the rest of the world. “Within the country, coverage is quite high. It is a sector that is not held back on account of us being a small island. One very interesting aspect of Malta is that its small size allows companies to develop products here and test them on a nationwide level.”
The digital gaming sector has witnessed a huge growth spurt as companies registered in Malta can offer their products in other EU countries. While it is a huge industry on its own, it has also spawned a very large service industry for itself in terms of strong ICT back up, infrastructure and software development.
Aviation, a relatively new sector, has been growing well with Lufthansa Technik and SR Technics having maintenance repair and overhaul operations in Malta and in speaking on the maritime sector, Brockdorff shared that it has traditionally played an important role as a logistics hub in the Euro-Mediterranean region. “Our Freeport is a major player in the Mediterranean we tranship over 3 million containers per annum. We are the largest ship register in the EU and our reputation has improved. We offer very competitive registration fees, VAT and taxation issues. We are a prime destination for super-yachts, as it is cheap to winter here and the quality of service delivered is quite high.”
Brockdorff stressed that Malta offers investors a secure and transparent environment in which to build or expand a business by introducing business friendly policies and supported by a legal and regulatory framework that is harmonised with EU legislation. In addition to Malta’s sustained investment in telecommunications and transport infrastructure, fiscal benefits and the provision of custom-built production facilities are incentives that are on offer for international investors.
“To set up a company in Malta, one doesn’t need a Maltese partner. It is perfect for smaller business looking to break into the European market with our diffused economy, political and social stability, transparent legislation, and overall safety.” He also shared that the country’s most valuable resource is its highly skilled and qualified workforce who are quick to adapt to changing technological and market needs.
The Malta Enterprise network operates in various countries around the globe, with offices or representation in embassies and consulates in North Africa, the Middle East, Asia, the United States and Australia. The Corporation also coordinates initiatives to promote the Islands’ economic growth attractiveness. It is also responsible for the growth and development of Maltese enterprises both locally and beyond our shores and works hand in hand with businesses to help them set up, expand, innovate and access global markets; thus sustaining economic growth and retaining and increasing employment.
By Cinatra Fernandes – Arab Times Staff