As we close another successful year for business and the economy in Malta, Malta Chamber President Frank V. Farrugia looks toward 2018 as a new year that is not without its challenges.
“The biggest challenge I see for businesses as we move into 2018 is the lack of skilled workers,” Mr Farrugia says, emphasising the need for the education sector and industry to work together to tackle the issue. In fact, the Chamber is involved with the Ministry of Education in the formulation of certain courses for businesses, he reveals.
Brexit poses another potential challenge moving forward, though the situation remains unclear. “We don’t really know what’s going to happen – the situation is changing every day. Brexit will certainly affect our country – a change in the rate of exchange, for example, will affect us favourably or negatively; and when it comes to industry, 60 to 70 per cent of Malta’s exports go to the UK,” the Chamber President maintains, going on to make reference to the issues that have arisen within the EU among other member states like Spain and France.
“Locally, I don’t see a threat in the immediate future, but we need to look at the long-term, within the next two to three years. Our economy is not dependent on one sector, but we have to be careful to remain competitive,” he asserts, highlighting elements such as energy prices among local businesses: “according to Eurostat, we are paying about 46 per cent more for energy than any other European country. We have prepared a study which we’ve presented to Government, and have made propositions such as the introduction of night tariffs.” The Chamber President also warns that care must be taken when it comes to Government’s introduction of certain measures which can affect businesses. “Increasing the amount of leave in relation to public holidays falling on weekends over the next five years is going to be a cost to our competitiveness,” he says, affirming that in Malta, we already have more holidays than our colleagues elsewhere.
And while there’s been an overall boost in various areas of the islands’ economy, with a distinct rise in the number of foreigners coming to work here and new businesses setting up shop, it is also true that the country has also become somewhat chaotic as a result, with more construction, traffic and road congestion. Looking at this development from a tourism standpoint, Mr Farrugia believes that we may be falling victims to our own success, and emphasises the need for a balance to be maintained. “Government has announced a seven-year project to tackle Malta’s road infrastructure. We as a Chamber are ready to participate and offer our know-how should it be needed,” he maintains, affirming that it isn’t simply a question of building or fixing roads, but also taking several factors into consideration, including charging outlets for electric vehicles, proper planning when it comes to passing services and maintenance of existing systems.
As for the impact on tourists, Mr Farrugia continues, “we need to formulate a plan to tackle the infrastructure while protecting our tourist industry at the same time,” going on to emphasise the importance of attracting the right type of visitor. “We need to improve the quality, not just the numbers. We need tourists that appreciate what is going on,” he explains, pointing to Valletta’s role as European Capital of Culture in 2018. “A lot of investment has gone into Valletta, and we need to make sure that the same thing happens all around Malta, so that tourists can experience something here that they won’t find anywhere else.” Finally, he quips, “the general cleanliness of the island needs to be tackled, and enforced with heavy fines.”
Looking back at 2017, Mr Farrugia assesses the major milestones and achievements and feels that a lot has been achieved over the past year. Speaking of Malta’s EU Presidency throughout the first six months of 2017, he says, “I feel that Malta has scored very highly. At a recent European Economic and Social Committee conference in Brussels, we had delegates from different countries standing up and praising Malta’s Presidency, saying that we had organised it well and that they were impressed by all that was achieved.” Finally, he goes on to point out that despite it being an election year, “the economy has done well, we’ve increased our GDP and had a surplus – so in general I think we have done well.”
Building on 2017’s success, I ask, what would the Chamber President like to see achieved in 2018? Apart from further investment in Research & Development, which he believes is an area which requires players from different spheres to take on a more pro-active approach, Mr Farrugia further stresses the importance of enforcement and abiding by the rule of law: “if we want to succeed, we have to abide by the laws of the country.”
Moving on to Valletta’s role as European Capital of Culture in 2018, Mr Farrugia believes it will certainly serve to boost businesses in Malta. “Cities which have held the title in the past experienced between 10 to 15 per cent increase in visitors. Next year, we will have over 400 different events taking place all around Malta and Gozo, so there’s truly something for everybody. If we do it well, I think it will be very positive,” he says.
Moving on to his priorities as Chamber President in 2018, Mr Farrugia aims to further consolidate the work that the Chamber is doing to reach and provide help to its members.
“Through TradeMalta and EEN, we are helping businesses to market their products and internationalise. Our aim is for every member, whether small or big, to know about all that we can offer and how we can be of help,” he maintains, fostering a communication system through which members can share their challenges and seek out help. Finally, the Chamber President affirms, “the most important thing I’d like to see going in to 2018 is commitment from the Council Members and all our Sections. I believe that together we can succeed where individually we can’t. I’ve always believed that the sky is the limit, but in order to reach it, we have to work hard.”
This interview originally appeared in Economic Vision 2018