Michael Grech, President of the Gozo Business Chamber, tells Sandy Calleja Portelli about the challenges and opportunities that Gozo’s business community is facing.
How would you describe Gozo’s current business scenario?
The current business scenario in Gozo is not a very rosy one – the financial and economic downturn that hit the world over the last four years has left its impact on Gozo as well. In the first quarter of the year, a very long electoral campaign and a budget which did not make it through Parliament certainly did not help.
Business in Gozo revolves mainly around three main pillars: construction and property development, tourism, and the services and retail sectors.
With regards to construction, developers are still stuck with a huge book of unsold stock and massive cash flow problems.
In tourism, although the number of arrivals to Gozo has increased (we also saw a decrease in domestic arrivals) the spending power of these tourists is not what it used to be in the past. Hoteliers, restaurateurs and owners of holiday farmhouses and apartments complain that the long shoulder months take away most of the profits accumulated during the summer season. Banks have also become very sensitive about providing finance and in most cases those who really need finance are denied access because they are now deemed to be too risky to lend to.
What potential do you see for businesses in Gozo?
I believe that Gozo has a lot of potential which is not being used to the maximum.
Gozo is an exceptional island. In only 67 square kilometres it boasts a rich history going back around 7,000 years, exceptional beaches and diving sites, a lovely countryside, a rich culture, some exceptional Mediterranean cuisine and most importantly a warm and very enterprising population. Where in the world would you find such a concentration in so small an area?
The Gozitan business community has the drive, foresight and enthusiasm to succeed and move forward. All that it wants is to be treated in a different and separate way to Malta. Gozo needs and deserves to be treated differently.
What do you think needs to be done to attract more business investment to Gozo?
Gozo needs to be treated in a different way to Malta. For example, considering the lengthy shoulder period that Gozitan businesses go through, it is only fair that the licences we pay reflect this. In fact a few years ago, the Gozo Business Chamber convinced the authorities of this and the licence fees were reduced by 25 per cent.
The major factor which could attract more business to Gozo would be a permanent link between the two islands. This proposal has now reached the stage where government has issued a tender for a feasibility study. Since this project may take between eight and 10 years to be realised, we still need to assure the maximum amount of accessibility between the two islands.
Furthermore government needs to create as many incentives as possible to enable Gozo to take a percentage of the i-gaming and fund management business that Malta has seen over the last few years. These incentives need to be of a fiscal nature to succeed.
Is Gozo dependent on Malta?
Gozo is very dependent on Malta and until we have a permanent link things will remain pretty much the same. Having said that, I still believe that if the government of the day acknowledges the problems we face and pledges to put its money where its mouth is and invests or at least creates the right atmosphere for others to invest in various projects in Gozo, then things will definitely improve.
The Gozitan business community has the drive, foresight and enthusiasm to succeed and move forward
The crux of everything is the political will of the government of the day. During pre-election meetings that the Gozo Business Chamber had with Prime Minister Joseph Muscat, that political will was promised to us. We now look forward to working with the Minister for Gozo and government in realising projects like a cruise terminal for Gozo and the resumption of at least a helicopter service between Malta International Airport and Gozo.
Is Gozo fully benefitting from EU funding?
I don’t think that Gozo, like Malta, is benefitting to the full from EU funding. We still have the promise that at least 10 per cent of EU funds received by Malta will be spent in Gozo. However there are still billions of EU funds which remain untapped by government, the private business sector and non-governmental organisations.
This year the Gozo Business Chamber won a tender to have a Europe Direct office in its premises which has a dedicated person who can provide information on anything regarding the EU. Furthermore MCESD and Meusac have a joint office in Gozo which can help a lot in providing information on EU funds. However, we need more expert help in filling in applications for these funds – most of the small businesses in Gozo cannot afford to engage a consultant for such a job.
Is there room for improvement in Gozo’s relations with the EU?
Gozo’s situation can improve. The EU is all about getting everyone on the same level playing field by helping out those remote and insular regions to make a quality leap up to the same level of other countries and regions.
The Gozo Business Chamber forms part of Insuleur, a group of similar chambers of commerce who come from other insular islands. This organisation acts as a lobby group for these chambers in highlighting their problems with various entities at EU level and even with the Commission itself.
On November 8, the Gozo Business Chamber will be hosting the annual Forum of Insuleur in Gozo. This will be the ideal opportunity for Gozo to make its case not only with the central government in Malta but also in a direct way with the EU via Insuleur.