Malta 'seeking opportunities' from economic crisis

Noting the silver lining around the dark clouds of the economic downturn, Finance Minister Tonio Fenech said yesterday the economy was "relatively stable" and "not in crisis".

He said the country was seeking to exploit the opportunities of the global crisis.

"The situation out there is not easy but Malta should look at the opportunities rather than the difficulties. There are a number of sectors where the signs are positive.

"We are taking adequate measures, which we need to sustain, and we need to be open to new ideas. The challenge is how to identify the opportunities and make them work for companies and for the country itself," he said at a business breakfast organised by The Malta Business Weekly.

Analysing the prevailing economic situation, Mr Fenech said that although the European Commission was forecasting negative growth in many countries this year, Malta was still expected to be in positive territory. The forecast for 2010 was that most European countries would return to growth.

Still, the figures churned out by the National Statistics Office were already indicative of what Malta could expect. In 2008, exports fell by 16.5 per cent, mainly due to a decline in orders in the manufacturing sector. And figures released yesterday for January showed a drop in tourists of about 20 per cent.

Taking note of the figures, Mr Fenech also pointed the brighter side, such as the cruise liner industry, which, so far, appears to be holding its own.

He said the government was keeping a close eye on tourism and would be boosting its marketing efforts.

"If there is the need for additional investment in marketing, we will do it, especially in the new markets. While we are proud that tourists from the UK account for 40 per cent of our tourism totals, we cannot remain so dependent on one market and we need to spread out to other markets to balance our portfolio."

In the construction industry, prices had seen a mark down over the months, not least because of an element of over-supply. However, Mr Fenech said statistics on promises of sale and final deeds showed that property was still being bought.

Referring to the budget measures last November, he said that any stimulus measures had to be based on fiscal prudence. Malta's debt level relative to GDP had increased slightly but was still close to the Growth and Stability Pact reference point.

Foreign investment in Malta in the first nine months of last year reached €417 million and, even in the prevailing climate, Malta was still managing to attract investment.

The minister referred to the task force set up to help companies weather the financial crisis.

An agreement has been reached with switch-manufacturer Methode Electronics, which the minister said would turn the company around, and talks on the same lines are being held with Trelleborg and Stainless Steel Products, both of which are working four-day weeks.

The minister said the government-appointed task force was discussing matters with different companies on a case-by-case basis and seeking to provide assistance that did not amount to subsidies but, rather, support for investment so the companies could grow once the crisis was over.

After going on a four-day week in November, Methode this week announced it would invest €6.5 million in Malta following an agreement reached with the government.

The news was welcomed by the General Workers' Union, which expressed satisfaction that the government was taking the initiative to support companies in these tough times.

The union said the plans should be more comprehensive and should include all sectors facing difficulties. In this way, companies in such sectors would remain in Malta and jobs would be retained.