Comic this week: Is this the ‘new economy’?

Investing in Malta

The news that the United Nations has placed Malta fifth in its global rankings of foreign direct investment is indeed welcome news in that it serves as testimony that Malta is on the right track in dealing with this important economic sphere.

Not just to those at the Malta Development Corporation, who are tasked with promoting inward investment, but also to those with an interest in the progress of the economy as a whole.

In the latest rankings released by the United Nations Conference on Trade and Development, Malta was found to have climbed from the 28th place it was given for the 1988 to 1990 period to the far more satisfactory fifth place for the 1998 to 2000 time frame.

While no fewer than 140 countries were involved in the study, in Malta’s case the inward Foreign Direct Investment Performance Index rose from 2.4 to 4.6 - meaning that the country managed to attract 4.6 times the FDI that would be expected for its size.

The findings reaffirm those published last year by a leading German bank, which showed that Malta enjoys the largest level of foreign direct investment per capita among the EU applicant countries.

In fact, total investment in the manufacturing sector alone had nearly trebled from Lm23.4 million in 1998 to Lm74.7 million last year.

Local trends in foreign investment have changed over the last ten years, which had seen the withdrawal of many clothing, footwear and certain low value-added manufacturing activities due to cost and strategic considerations.

In their stead, Malta has been actively pursuing investment from the electronics industry, which it has done with a measure of success.

But the manufacture of electronic components in Malta actually began over three decades ago when a large American manufacturer set up a plant on the site currently occupied by STMicroelectronics, Malta’s single largest exporter. The expertise accrued in those days, when the development of information technology and electronics were still at a comparably embryonic stage, served the country’s workforce well.

Ensuing similar investments have done well and the electronics manufacturing sector today accounts for some 65 per cent of all manufactured exports.

Malta has proven itself time and time again a worthy investment location and the results of foreign companies operating out of Malta, particularly in the manufacturing sector, show they have fared well in the face of an increasingly competitive global marketplace.

Among the obvious attractions are Malta’s much lauded geographical position between the developing Maghreb countries of North Africa and the industrialised European market, its highly skilled labour force, favourable economic conditions, competitive factory rates and sophisticated financial services and banking facilities.

Despite the ebbs and flows of the global economical tide, there can be little doubt that Malta remains a profitable location to operate from. In fact, figures demonstrate that the foreign companies choosing to invest in Malta have ended up reaching their targets much faster than they had initially planned.

These successes are mainly thanks to the positive local investment climate, given further weight by the updated Business Promotion Act, and the enthusiasm of the Maltese workforce to learn and adopt new technologies and working methodologies - factors that are ultimately reflected in companies’ profitability and productivity.