2009 Index of Economic Freedom ranks Malta's economy as 'moderately free'

Malta enjoys a greater degree of economic freedom than Italy, but less than Georgia, Oman and Botswana, according to a survey carried out by the Heritage Foundation and Wall Street Journal.

The 2009 Index of Economic Freedom ranks Malta 47 out of 179 countries assessed on the basis of 10 criteria, including government size, freedom from corruption and financial freedom.

While scoring above world average in trade freedom, business freedom and monetary freedom, the survey shows that burdensome taxation, government size, perceived corruption and rigid labour laws are the major hazards for Malta's economic freedom.

The report praises Malta for its "well-trained workers, low labour costs, and membership in the European Union" but slams the government for maintaining a "sprawling socialist beaurocracy".

Malta's competition policies were commented upon approvingly by the panel of experts, describing them as "transparent and effective".

Government size is, however, looked down upon with the report arguing that consumption and transfer payments are still very high.

"Corruption is perceived as present," the report argues, stating that Malta still lacks a comprehensive anti-corruption strategy, as well as the appropriate institutions to implement and monitor anti-corruption activities in the public sector and specific areas of law.

The report also points out that the development of the financial sector is still marginal, despite its transformation and developments in recent years. The lack of capital markets functioning effectively is seen as negatively affecting Malta's ranking in this area, while its adoption of the euro augments it.