Last week, I had the opportunity to address the EY annual survey launch which discussed 50 years of foreign direct investment in Malta, and its prospects for the future. There is no doubt that Malta and the Maltese people have, since 1964, performed nothing short of an economic miracle. I dare call it a miracle because, unlike several other countries, Malta has no raw materials to rely on except its people and their skills.

Indeed, during these last 50 years and through the hard graft and foresight of our people, Malta managed to build itself into a strong case-study of economic success.

From nothing, we built a robust manufacturing industry that has managed to reinvent itself continuously, established a diversified tourism industry that expects one-and-a-half million visitors yearly, and witnessed breakthroughs in sectors such as shipping, financial services, gaming.

All this has given us a healthy spread of economic activity which provided protection from global shocks such as those that have rocked the global economy since 2008.

However in my business we say that past performance is no guarantee for the future. Where do we go from here? Is our successful economic history a guarantee for a sustainable and prosperous future?

This is a question which the Malta Chamber of Commerce, Enterprise and Industry felt the need to address and it is indeed the question that has prompted us to articulate an Economic Vision for this country.

The Malta Chamber’s Economic Vision for Malta 2014-2020, takes stock of Malta’s limited resources, the global scenario, the country’s economic strengths and its past achievements before recommending a way forward that maximises prosperity for the people of this country.

In its vision, the Malta Chamber purposely identifies a wide range of sectors because it believes the preservation of a diversified economy is key.

Diversification promises economic strength and resilience in challenging times. The healthy co-existence of traditional sectors with knowledge and IT-enabled services is vital.

Besides diversification, the vision also places strong emphasis on focus. Malta cannot position itself as ‘everything for everyone’. It must focus its resources towards those productive and economic sectors that will optimally leverage opportunities – existing, emerging and new.

In several of our recommendations, we are calling on the government to create the enabling environment for business to invest and prosper and let the private sector do the rest.

We see the government as our partner in business. We must be realistic and admit we cannot achieve our sectorial targets and macro objectives if Malta continues to lag behind in the rankings on attractiveness, competitiveness and ease of doing business. In the successful economy we envisage, the public and private sectors must complement each other at all times.

We are also placing a strong emphasis on quality. Malta is competing in a global village which is increasingly defined by excellence and quality.

We are convinced that we can secure a successful economic future for this country if we can work together towards an ultimately coherent economic vision for Malta

In today’s business environment, mediocrity and sub-standards are ruthlessly and damagingly exposed.

For this reason we are calling for a concerted effort by all social partners to inculcate a culture where the current ‘good enough’ attitude is replaced by “nothing but the best”.

Likewise, innovation is a strong ingredient of competitiveness and we must embrace it and encourage it. Given the absence of any natural resources, our continued economic growth depends on upgrading and enhancing our own capabilities to innovate.

Economic journeys do not end. In fact, they are not journeys at all, but races where countries must run faster and smarter every day or they will be left behind.

We know very well that our achievements are not permanent and they must be protected and often re-invented otherwise we risk losing it all. There is so much more we can do to improve Malta’s economy and the well-being of our people.

As we stand at crossroads, our business community remains ever optimistic about the country’s future prospects.

The findings of the EY annual survey confirm the opinions and positions of the Malta Chamber. We are convinced that we can secure a successful economic future for this country if we can work together towards an ultimately coherent economic vision for Malta.

With our economic vision, we want to provide a business agenda for the government rather than wait for it to provide an agenda for business.

We cannot however talk about Malta’s future economic aspirations in isolation of developments taking place in Europe. By 2050 none of the European member states are projected to be among the world’s largest economies.

We only have a choice between succeeding together or becoming insignificant separately. Europe is experiencing a slow but steady recovery but restoring the continent’s competitiveness will take more than a few years.

It is good to see that countries that have made reforms in recent years, notably Portugal and Spain, are now growing.

Nevertheless, the fall in output in Italy and the absence of growth in France remind us of the urgent need for a number of EU states to make rapid progress in structural reforms in order to raise long-term growth prospects.

Due to high operating costs, high energy prices and excessive administrative burdens, Europe is becoming less attractive as an investment location.

Europe is losing investments not only to fast growing economies but also to developed economies such as the US.

Even if Europe continues to be the leading world investor, its share of the global FDI inflows fell to 24 per cent in 2012 compared to 40 per cent in 2000.

If Europe wants to increase its share of global FDI inflows it should be outward-looking and seek to benchmark its attractiveness and competitiveness with developments taking place outside and not inside Europe.

Fiscal consolidation and growth enhancing reforms must go hand in hand using the flexibility in the stability and growth pact to put in place bold structural reforms.

The bias towards tax increases must be corrected by reducing public expenditure and implementing measures to improve competitiveness as foreseen in the Country Specific Recommendations endorsed by the European Council last June.

On the other hand, when governments are thinking about the way to reduce public expenditure they need to be careful not to harm areas that will have the strongest long-term benefit for future growth such as cutting down investment in education and skills which can improve employability particularly of the young and long-term unemployed.

The new European Parliament and Commission should keep “competitiveness first” and turn words into action.

The Chamber feels privileged to be contributing towards the wealth of our nation in the years to come. We look forward to collaborating with our partners at the Malta Council for Economic and Social Dialogue towards the realisation of the recommendations in our economic vision, for the benefit of our nation.

David Curmi is president of the Malta Chamber of Commerce, Enterprise and Industry.

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