Our economic history is intrinsically linked to the sea, but it fell sadly into disrepute over the past 50 years, what with the decline of the shiprepair and building sectors, to the undesirable – though not quite understandable – connotations of a sun and sea tourist market. It is high time to change all that and exploit opportunities which may create new growth over the next 10 years.
One obvious reference point is the Blue Growth Strategy being advocated by the EU Commission, which targets the marine and maritime sectors and their contribution to the economy in a sustainable manner. The areas targeted by the strategy are some of the main contributors to job creation in Malta with the largest sector, coastal and maritime tourism, generating up to 10 per cent of jobs.
Tourism has always been a driving force for the Maltese economy. Its success is not only related to marine activities but also to the wider maritime sector including cruise liners.
Future prospects within the tourism sector depend on the creation and diversification of marine and maritime activities, including homeporting and sports. Other crucial areas contributing to the economy are the transport, shipbuilding and shiprepair, fisheries and aquaculture sectors, which present important potential for development.
The foundation of these sectors has been long established. However, they are far from their full potential. These sectors face a number of challenges but with proper support they can embark on both local and international opportunities to increase their value added.
The main concern is that although the Blue Growth economy contributes around 20,407 jobs, the productivity of these sectors is low when compared to other countries. Although the share of employment in maritime activities in Malta outstrips that in Greece, Italy and indeed the EU average, the value added generated from every job is the lowest compared to these economies. Furthermore, the economic contribution of the targeted sectors is still relatively small when compared to other sectors.
It is estimated that an increase in productivity would generate an increase in annual value added of around €195 million, around €480 per capita. This translates to economic growth of approximately 3 per cent.
So far, the Maltese economy has focused on value added from tourism, transport, shipbuilding and shiprepair, fisheries and aquaculture. However, ‘non-traditional’ and ‘unexplored’ sectors, such as renewable energy and biotechnology, should be considered. These could lead to new activities and create new job opportunities. This entails research, collaboration with investors, change in infrastructure and much more.
Parallel sectors should also be considered. These include education, research and development and innovation, health, international regulations, laws and licensing, finance and insurance and other sectors which could increase value added.
Overall, prospects in this sector are conditioned by two imperatives. The first requires a more rational and effective use of natural resources and the available maritime infrastructure including ports. The second involves exploring and investing in new sectors that could lead to additional economic growth.