Here, five members of the Board of Management of the Malta Chamber of Commerce, Enterprise and Industry consider the changes Malta is going to have to make if the country wants to safeguard both its business interests and its environment.
David Xuereb, President
“In 2020, Malta’s economic growth is expected to continue but at a slower rate,” Perit Xuereb notes, adding that sustainable and smart economic growth should be prioritised. “Our main challenge is ensuring that Maltese business isn’t overshadowed by international competition. But there’s no escaping the fact that we are facing limited resources and ever-increasing costs of employment.”
Perit Xuereb is also cognisant of Malta’s position on the global stage, elucidating that fast-changing global trends will inevitably impact the country. “A case in point is Brexit, the effects of which are yet to be understood but expectations aren’t encouraging. We must remain vigilant to react and proactively adapt.” Acclimation will also be an indispensable trait in upcoming years when big data and artificial intelligence (AI) are set to change lives dramatically.
“AI, 3D printing, quantum physics and the early regulation of disruptive industries will take centre stage, which is why I want Malta to become a centre of excellence in education, research and innovation across all segments. We must bridge the gap between our education system and the ever-changing market needs to meet the requirements of future industries.”
Marisa Xuereb, Deputy President
Malta’s rising labour costs in tourism, manufacturing, gaming and financial services are stress-testing long-established companies, Ms Xuereb says. “The cost-value relationship is strained, so maintaining and improving product quality is imperative to withstanding the higher cost base.” “We’re entering a period of ‘clean-up’, in which we must address construction sites that have invaded residential and touristic areas on the one hand, and the repercussions of deficits in institutional and corporate governance that have tarnished our reputation internationally on the other.” Ms Xuereb is closely following what is happening beyond Malta’s shores.
“Brexit’s impact on business is, as yet, unclear, while the US-China dispute remains worrisome. Locally, though, the necessary shift in real estate seems imminent, and foreign workers will still be needed to meet labour demands.” “That said, the costs of high labour turnover are eating into margins, so we should see a reduction in headcount and concerted use of technology to streamline operations. I hope education and industry requirements align, particularly vis-à-vis new economic activities, such as blockchain and AI, which will continue to gain traction.”
Hugh Arrigo, Vice President
“In Europe, all eyes are on Brexit as we enter 2020. Brexit will impact the entire EU as the UK’s contributions to the EU equal those of the 19 smaller member states. In other words, the EU isn’t simply reducing from 28 to 27 members; it’s losing a major player.” “As a country, remaining in our comfort zone will do us no favours,” Mr Arrigo points out. As a founding Council member of the Maltese-Chinese Chamber of Commerce he knows the importance of seeking new international opportunities. “I want to see connections between Malta and Germany and Asia being strengthened. Our generation is the product of Germany but our children will be the product of China and we should face this reality with open arms.”
“Germany has long supported Malta; it was even instrumental in getting us into the EU. Enhancing our relationship will open doors in 2020 and beyond. Likewise, China is a force to be reckoned with, and it will become the superpower of superpowers. We must consolidate our relationship with China to capture Chinese business reaching Europe and the Sub-Sahara via China’s One Belt and One Road global development strategy.”
Liz Barbaro Sant, Officer
As a member of the Chamber’s Board of Management, Director of Trade Malta and Secretary of the Maltese-Libya Chamber of Commerce, Ms Barbaro Sant is attuned to the economic, social and cultural transformations that have occurred in Malta over recent years.
“Malta has witnessed exceptional growth,” she notes, “but this has also triggered major infrastructural and social struggles including a tightening of the labour market and unrealised productivity potential. To sustain competitiveness, Malta needs to solve these problems and revisit planning strategies to ensure we can serve future generations.”
Reasserting views that Malta lacks longterm vision, Ms Barbaro Sant explains: “Only with a far-reaching vision can Malta pave a path towards this imagined, successful city-state. We must fix today’s troubles without damaging our strategy for future prosperity.”
Malta’s future, however, is also dependent on proactively tackling sustainability. “Some companies understand that, besides intertwining business growth with social change, they must effectively facilitate the true integration of sustainability into their culture and ethos. But all companies have a responsibility to contribute to solutions and to foster an approach to CSR that takes more than simply writing a cheque.”
Andrew W.J. Mamo, Officer
Along with Malta’s economic growth have come unprecedented opportunities. “Consumers have more purchasing power, encouraging companies to become more innovative and promoting competition,” Mr Mamo says. “Government is also offering funds to companies to enable them to compete within the growing EU market.”
“Having said that, challenges have also emerged. Across the board, business and residential costs have soared. The cost of real estate – both residential and commercial – has risen exponentially, partly due to the gaming industry. We’re also experiencing heightened labour costs as employees expect higher wages, and labour shortages are compounding the problem.”
Unquestionably, problems are rife but “Malta’s economy has been succeeding and progressing thanks to the services industries, primarily tourism, financial and professional services, real estate and gaming,” Mr Mamo points out. And although there may be some slight corrections in 2020, he does not see these segments slowing down soon.