It’s the year 2025. You click on Wikipedia for some information on the Maltese economy and it gives you something like this:

Malta has an advanced economy that has managed to re-invent itself at various points. Lacking any key natural resources, it has used its geographical position and entrepreneurial spirit to become a net importer of talent.

Individuals seeking employment in one of the country’s innovative sectors as well as founders of start-ups flocked to Malta as the start-up incubation hotspot of choice. Attracting and retaining foreign employees has been achieved by offering enticing job prospects and qualityof life opportunities, as well as a collective national effort at cultural integration.

This focused policy has allowed Malta to address its chronic labour shortage issues – caused by a small as well as an ageing population – which had been persistently eroding competitiveness and the country’s attractiveness a decade ago.

At the same time, start-ups were attracted in droves by dint of a consolidated and relentless effort at marketing Malta’s pro-business and can-do attitude.

Due to the island’s unique historical, cultural and climatic features, tourism remains a key contributor to Malta’s national wealth

This approach allowed this tiny island in the middle of the Mediterranean to address the inevitably limited pipeline of new business.

Uniquely, Malta has strengthened its position as a global player in financial services and iGaming by quickly realising the cross-linkage with the fintech space and digital gaming through sector-specific strategies and the adoption of ad-hoc regulation.

Other areas benefiting from tailor-made regulation include logistics (including physical platform for e-commerce sites) and commodities trading, which have continued to fuel the drive towards a more diversified economy.

Due to the island’s unique historical, cultural and climatic features, tourism remains a key contributor to Malta’s national wealth. However, even this sector has intelligently reinvent itself as inevitable carrying capacity issues led to a policy flight to offer more quality and attract smaller numbers. This has been accomplished through an improvement in the services provided as well as in the entire supporting infrastructure.

Malta has undertaken an ambitious seven-year plan of extensive infrastructural spend, addressing areas such as the environment, roads, water, energy, broadband, cultural and historical sites, sport facilities and accommodation.

It is being financed through a blend of EIB and EU funds, as well as significant local funds (private sector, financial institutions, household savings), leveraged through government initiatives taking the role of a catalyst rather than a direct investor/lender.

At the same time as providing a much-needed infrastructural and product offer upgrade, the plan has also provided a nation of traditional and risk-averse savers with alternative investment opportunities, away from the local favourite real estate and the inevitable hike in property prices.

Malta has also managed to re-invent its transport system. Shortly after the turn of the millennium Malta started facing huge traffic congestions on its narrow roads due to the inhabitants’ almost obsessive attached to their cars.

Through a mix of innovative but sometimes draconian economic policies and the rapid take-up of smart technologies, the use of private cars has been both smoothly reduced and made more efficient.

Lessons learnt from this transport revolution are now being directed at two other areas that until now have remained elusive for policymakers – healthcare and pension reform.

Chris Meilak is an economist and senior manager at EY Malta’s Economic Advisory Unit.

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