Malta's investment attractiveness

Yesterday Ernst & Young presented the results of the survey held annually as part of an international study on the attractiveness of countries and regions around the world with regard to investment. Malta was once more included in this study. In his introduction to the Malta report the Managing Partner of Ernst & Young Malta, Mario Galea, states that the survey is very much a perceptions survey; but perceptions can influence decisions as much as facts, if not to a greater extent.

It also needs to be stated that in an international study on investment, Malta will never feature to a large extent because of the smallness of our economy, but the pointers that one obtains from such a study are still very useful for policy makers. Moreover, Malta can never be the flavour of the month in the area of investment because in reality we have been around for so long (since the late 1950s!) and because we never make the news one way or another. Thus awareness of Malta is never high, but those that may be called investment connoisseurs do know about us and have benefited from the island's potential.

The results of the Malta Attractiveness Survey of 2008 immediately highlight two features. The first is that the country is considered an attractive location for investment because of the stability it enjoys. The survey shows clearly that the perception of respondents is that Malta enjoys a very high level of economic, social and political stability. Obviously, one needs to mention that stability in a country is not achieved by chance. It is achieved thanks to appropriate government policies and the attitude of the social partners.

The government's policy for the last 21 years (with the exception of just twenty two months) has been focussed on EU membership and maximising the opportunities and managing the risks that such membership brings about. 2004 was the year we joined and this year was the year we adopted the euro. The rights and obligations that we have as a member state of the EU and the eurozone have helped us to create a political, economic and social environment that is conducive to attracting investment. Now government's policy is focussed on sustaining this stability in the longer term, thereby ensuring that the investment that is attracted to Malta grows and stays here.

The social partners have always tended to favour policies that generate wealth and employment. There may have been times when the short-term objectives of one organisation or other conflicted with that of government. However, the feeling that one gets over the years is that eventually good sense prevailed, especially when times got tough. It is this sense and sensibility that investors have perceived and have found it to be matching with government's policies.

The second feature that the survey highlights is the extremely positive human factor in our economy. When respondents were asked to rate various investment attractiveness criteria, the three criteria that emerged at the top of the list are all related to the human factor - the level of English of the human resources, the level of productivity of our human resources and the social environment. Here we are not talking of the hardware side of the economy, such as the infrastructure, or industrial premises, or natural resources, and so on. This is rather the software side of the economy. This result provides ample comfort to government in that it is seeing its policy to invest in our human resources through the better provision of education and training is bearing fruit. Moreover, one needs to appreciate that there is a limit as to how much a country can leverage its economy through its hardware elements, but there is just no limit to such leverage when it comes to the human factor.

On the basis of these two features, I believe that Malta's business identity is really taking shape. In the tourism sector, hospitality is a key element of the country's identity. This survey is indicating that hospitality to investors and their investment is also swiftly becoming our hallmark and consequently our business identity. Sustaining a high level of hospitality to investment is a responsibility that each and every one of us has to fulfil daily, because on nit depends our well being.