If there is one area there should be agreement about, it is how to attract export-oriented foreign direct investment. Malta remains heavily dependent on imports to meet its consumption requirements and foreign goods and services flow at a fast pace into our open economy. To finance those imports we need substantial exports of goods and services. Inflows on the capital account are not adequate enough.

Less controversy and more pooling of ideas would be helpful- Lino Spiteri

Our expansion of the financial services sector does not result only in waves of short-term capital movements coming inwards. Some of the financial units, including two very active banks, are being used to siphon money out of Malta. These are not funds going into investment where they seek a return commensurate with the risk taken.

I am referring to funds placed on deposit which become surplus to the financial institution’s ability or readiness to lend and are easily transferred abroad to be used there by the group to which these institutions belong. This is easily identifiable from the institutions’ balance sheet, as one of our former top bankers, Anthony Curmi, pointed out some months back. Such transfers do not really yield much to the Maltese economy.

The inflow of interest paid on the outflows at the prevailing market rates cannot be much. But, back to the need to effect exports of goods and services to give the economy sustainable foreign currency earnings to support its reliance on imports.

The figures recording visible imports and exports no longer identify re-exports as such. The aggregates, therefore, are being distorted by the two-way flow of re-exported mineral petroleum products. As with capital lent abroad to parent companies, the net effect of these flows – the profit made by domestic traders, assuming it is booked and taxed in Malta – does not generate much economic activity.

It would be useful if the National Statistics Office were to give a more detailed account of these movements so that analysts can net them out of the trade figures to arrive at what is meaningfully being imported and exported. Even without such netting it remains safe to assume that we remain heavily dependent on visible earnings. We must consistently export, at growing rates to reflect increasing consumption through time, or regress.

Agreement on this basic indisputable objective still does not bring about further agreement on the type of national policies to pursue to attract foreign direct investment and also encourage domestic investment in export activities. That is exemplified by the continuing controversies over the running of Malta Enterprise. That body is Malta’s major tool deployed to encourage direct investment in export-oriented productive activities. It should be more than possible to agree on how Malta Enterprise should be run. Instead, political and media controversy dog the enterprise.

The latest controversy is about the move whereby Malta Enterprise was located within the grounds of the former St Luke’s Hospital. Those grounds, one of the finest locations in Malta, should have been the subject of a holistic development plan suited to the area’s multiple advantages. Instead, they seem destined to be re-utilised piecemeal.

That applies to relocating Malta Enterprise there. Strangely enough the actual destination of the relocation did not attract attention, much less fire controversy. Controversy arose, though, over the very handsome amount spent on rendering the space allocated to Malta Enterprise to fit the tastes of those who run it, starting with its executive chairman.

The controversy did not stop the expenditure of some €4 million on adapting and refurbishing the area until such time that Malta Enterprise moves to the business village the government plans to develop close to Fleur-de-Lys, assuming that idea is ever realised. Once the money has been spent, the issue is all over bar the shouting about who was responsible for the relatively massive item, equivalent to the 10 per cent cut the government began making as soon as its own Budget for 2012 passed through the House of Representatives.

Accountability aside, what remain essential is that Malta Enterprise carries out its clear functions with dynamism and efficiency. To say that it has produced good results is not enough. Much of the inward investment that has taken place came as a result of the well-crafted legislative treatment of financial and gaming institutions. That is not to say that Malta Enterprise was sitting on its hands, or that that it did not achieve some results.

Yet everything has to be kept in perspective. Whatever the extent of the success of the direct investment drive, it was not enough, for it can never be that. The effort has to be a continuing one with growing intensification. The executive chairman of Malta Enterprise, it has been confirmed, has asked not to be reappointed when his contract expires in some weeks’ time. He shall be going abroad.

Without any reflection on him, this is a good time to reassess how Malta Enterprise is functioning. Is the rate of hits commensurate with its marketing? Does it need a revision of strategy? For instance, it focuses – as it indeed should – on attracting investment with a high value-added content. The workforce is changing to meet such investment. Meanwhile the larger part of our registered unemployed is made up of unskilled registrants. Can retraining be combined with a modified marketing objective, one which still targets high value-added content but also tries to identify some investment that can be related to the unemployed, with suitable ETC intervention?

There remains much to do. Less controversy and more pooling of ideas would be helpful.