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Centre of excellence for maritime services

The Maltese economy’s Achilles heel is undoubtedly its dependence on a few economic activities that constitute a potentially serious concentration risk. Even as we steered away from low-tech manufacturing to embrace service industries, like finance and igaming, we are still dependant on a handful of economic activities that expose us to major upheavals should any one sector face tough times.

It would help to designate one area as Malta’s main maritime services centre
- John Cassar White

The renewed interest in the promotion of investment in maritime services is a refreshing development in the national debate on the strategic direction that our economy should be taking in the next two or three decades. However, we need to understand that our plans to promote Malta as a viable centre for maritime services must be robust if they are to succeed. Our location in the centre of the Mediterranean is a strategic strength, but on its own it will not deliver the economic success that will justify investment in maritime services.

We already have quite a diversified cluster of maritime services providers. Some, like big-scale ship repair, are possibly no longer viable as competition from low-cost countries has squeezed us out of the profitable end of this market. Other traditional maritime activities may be underperforming and not creating sufficient value added. We therefore need a strategy that promotes new economic activities to create the critical mass of maritime services providers that will position Malta as a centre of excellence for the maritime industry.

One would be mistaken to think that most maritime services need to be located in a maritime nation. Admittedly, countries like Greece and Cyprus have exploited their geographical location and maritime tradition to build a strong maritime industrial base. However, countries like Switzerland are also formidable competitors in certain sectors of the maritime industry. I was surprised to discover, for instance, that some of the most successful maritime consultants and ship managers are domiciled in Switzerland.

The maritime industry today includes many varied economic activities including ship design, ship management, shipping line operations, stevedoring, customs brokerage services, maritime environment protection, ship towage, offshore oil exploration servicing, freight forwarding, marine insurance and shipping finance are just a few of these activities.

These activities can only be carried out successfully by experienced operators. One of the first action points that a maritime services strategy should include is the attraction of direct foreign investment to lure experienced operators to Malta.

It would help to designate and develop one particular area on the island as our main maritime services centre. One hopes that the valuable land previous dedicated to ship building in the Grand Harbour area will be used in the most effective way to promote the setting up of this centre. If the ship repair activities in our old ship repair yard fail to thrive as much as one would wish they would, the vast expanse of land at present used by the private ship repair operator could be earmarked for further expansion for a new maritime services centre.

We also need to build on the maritime activities that already exist. The MCAST Maritime Institute could enhance its role by becoming an international training centre for ship crews. Our maritime museum could become a major tourist attraction through some much needed investment. Our university could introduce some new courses in ship management and marine insurance. The potential is endless, even if we should not spread out resources too thinly as we can never be all things to all men.

A strategy for setting up a new industry takes time to implement. It takes much more than writing a sound plan and identifying the location from where this industry would operate. We need to learn from the experience of Smart City which has arguably over-promised and under-delivered. A lot of work needs to be done to build the necessary infrastructure for a vibrant maritime services industry.

The timing for embarking on this venture is ideal. Greece and Cyprus, formidable maritime services centres, at present are passing through a difficult patch. The prospect of new investment going to a more stable economic environment that can be offered by Malta could be one of our best selling points.

But the most important critical success factor will be our commitment to high standards in everything that we do. High quality services should be the hallmarks that characterise Malta’s maritime services brand. A revamped maritime services industry will indeed help the diversification of our economy.

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