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In the years and months leading up to EU Accession there was much debate and some scepticism about kick starting Malta’s economy and attracting investment. Several economists, politicians and other commentators have emphasised the need for Malta to attract foreign direct investment.
Top government officials speaking to this newspaper off the record were quietly confident that soon after Malta’s accession FDI would start pouring in. Several foreign companies are supposedly interested in setting up manufacturing plants and the financial sector is also expected to get a boost with more foreign owned onshore companies registering themselves in Malta.
Accountants and lawyers have spoken to this newspaper in excited tones about attracting top companies soon after EU accession. And in these short one and a half weeks since Accession, several professionals have been abroad because of the interest being shown by foreign companies.
EU Accession is not likely to have any significant impact on tourism; and the economy left to its own devices is not likely to get the boost it needs from the Maltese business community alone. Malta’s manufacturing industry does not look ready to expand its horizons and benefit from exporting to the much larger EU market with its 450 million potential consumers. The restructuring of Maltese manufacturing concerns has for the most part been a case of too little and too late, and, given the economies of scale, Maltese-owned manufacturing companies that have not already started exporting are unlikely to survive.
This means that foreign investment may be Malta’s only hope to kick-start the economy.
Already foreign companies have seen comparative tax advantages of setting up in Malta and the new political standing of the country could well lead to greater interest from foreign investors. While Malta does not offer the cheap labour or large markets that can be provided by other new EU countries like Poland and Hungary, it still has a trained and skilled English-speaking workforce that could prove attractive to potential investors.
Malta Enterprise and John Dalli’s ministry for investment promotion have both the privilege and the responsibility of inviting foreign investors to Malta in the now changed circumstances of EU membership.
These months will be crucial both for the country and the government. If the investment fails to flow in a manner that will make a significant difference to Malta’s economy, the party in government, our position as EU members and indeed Malta’s future will all be put at stake.
If, one year down the line, Malta’s economy hasn’t demonstrated significant signs of recovery, what seemed to many like a dream come true may well turn sour. The months to come promise to be exciting for all those dealing with foreigners interested in bringing their businesses here. But the stakes are high and failure is not what we should be contemplating. |
