A new Chamber for a new, and challenging, year

Malta Chamber of Commerce and Enterprise President Reginald Fava addresses the Chamber’s recent 155th Annual General Meeting. Following are extracts from his speech, in which he gives commerce’s insight into issues such as EU membership, the Malta Business Bureau, the challenges and opportunities for small businesses, and the state of public finances

European Union Membership
I am, naturally, referring to Malta’s entry into the European Union. Allow me to take you back to the beginning of the year when we conducted an important survey to which we received a response rate in excess of 61 per cent of members. You will, no doubt, remember that ninety one per cent of respondents expressed themselves in favour of the conditions secured by the Maltese negotiators thereby giving their approval to Council to support Malta’s EU accession. Of course, the Malta Chamber of Commerce and Enterprise had been in favour of EU membership for the past three decades but this was always "subject to the right conditions" which our country deserved. This stand was consistent throughout Malta’s lengthy path towards the European Union and emerged from a number of studies commissioned by the Chamber, some of which it researched itself. The final word as to whether the desired conditions had been achieved or otherwise was down to the grassroots and today, I would like to thank you for the response and support you gave us.
Further to this crucial survey, we organised a high-level conference at the Mediterranean Conference Centre where we explained our position clearly before the entire nation. If you happened to be amongst the 700 present, or perhaps you followed the live broadcast on State television, you would recall that, on the day, we were addressed by the Prime Minister, the Leader of the Opposition and the European Commissioner responsible for Enlargement, Gunther Verheugen.
In terms of EU membership, the Chamber did not cease its efforts at the result of the referendum or the subsequent general election. On the contrary, with the Prime Minister’s signing of the Accession Treaty in Athens, we embarked on a bold restructuring process aimed at the strengthening and re-dimensioning of our resources in this regard. This should lead to ensuring that the Chamber shall continue to serve as the country’s primary source of guidance and information for the commercial community enabling the latter’s progress towards prosperity within its new commercial environment so that it can truly be referred to as "the motor of the economy".
Malta Business Bureau
I augur that the efforts we spent in this regard throughout the year would soon start to bear fruit. We endeavoured towards the aim of widening the Malta Business Bureau’s representation so that it would come to encompass all private-sector organisations. Besides, the role of the Bureau has now been redimensioned and shall now become more specialised.
In fact, the updated role of the Bureau shall primarily involve detailed research into the EU programmes aimed at private sector companies and the specific criteria and conditions for participation. Malta’s success from EU membership is strongly dependent on whether our members are fully aware about the mechanisms of each programme as well as on effective representation from our part.
We have begun a process to strengthen the Bureau’s technical and administrative capacity with a view to lead the way in the provision of this type of professional services. We have concluded an agreement which guarantees the services of Dr. Leonard Mizzi as Director General for the coming five-year period. During the summer months, we prepared a detailed business plan on the short-term operations of the Malta Business Bureau. This plan allows for the employment of two technical officials to support the Director General in Brussels and another two executives to run the local office. Some of these new employees have, in fact, been employed last week after the conclusion of a selection process.
You would, undoubtedly, acknowledge that this new structure required additional physical space in order to operate. Furthermore, you appreciated, because you expressed this at the Extraordinary General Meeting held last July, that it makes more economic sense to invest in our own property in Brussels rather than continuing with a renting policy.
As previously announced, we concluded the purchase of our new premises in Brussels after a detailed, albeit, brief process of selection for a building which was fitting for our profile and needs. The contract of sale was signed in October after the Council members and senior Chamber executives accompanied me to Brussels to see for themselves this property in the administrative centre of Brussels.
Some minor structural works as well as repairs and interior decoration are under way at this moment in time. The Malta Business Bureau shall start operating from its new address early next year.
The challenges and opportunities for small businesses
As you are well aware, after last April’s general election, the local business community was liberated from the climate of uncertainty which had been afflicting it for a long period of time. Now, we all know where our destination lies, when we are to get there and under which conditions.
Europe is now our territory and the Single Market is the place where, from May onwards, we shall offer our products and services. Maltese industry and business must count Europe as their home ground. We shall now no longer operate in an isolated market limited to 400,000 people. We must now consider ourselves an integral part of the Single Market comprising 450 million consumers. Consequently, our entrepreneurs may exploit a much larger "domestic" market. Besides, they can take advantage of public procurement opportunities related to 25 national governments and countless regional and local governments. Our businesses shall be eligible for EU funds dedicated to research, development and innovation. Meanwhile, they may also benefit from pan-European projects aimed at the private sector in the field of education and training. This is all to the great advantage of our sector, to our individual and collective competitiveness position and to our nation’s future prospects.
The private sector is currently striving to absorb a huge amount of information. Through the new role of the Malta Business Bureau, the Chamber is doing its utmost to ensure that the local business community would have orientated itself as much as possible towards the European Union over the remaining months up to membership.
The Malta Chamber of Commerce and Enterprise is hopeful that our commercial community will soon integrate within the European administrative set-up and adopt an open mindset to the various opportunities that this historic step shall bring about. I urge all our members to orientated themselves, between now and May, towards the new programmes for which they are eligible and seriously consider participation.
Fellow business colleagues, the challenge is right ahead of us. I urge you to face it with vigour. Let us demonstrate to ourselves and our European counterparts that the Maltese business community can reap huge success within the European Single Market which shall soon be ours to exploit. As we stressed during our last annual conference, we need not shy away from this challenge especially if the European Union, Government, the Opposition and the Private Sector Organisations all perform their duties. The Malta Chamber of Commerce and Enterprise is right behind you and I pledge its unequivocal support. I encourage you to take full advantage of the arising opportunities so as to provide for the deserved prosperity of our Islands which are so close to our hearts.
The Public Finances Situation
The Malta Chamber of Commerce and Enterprise keeps its fingers on the country’s economic pulse. It contributes actively to the social dialogue process which takes place within the Malta Council for Economic and Social Development (MCESD) between Government and representatives of employers and employees. Within this forum, as well as in our general representations, we strive to render our economy ever more competitive enabling it to develop in prosperity. This stand is taken on our realistic assumption that our members cannot progress unless the country is doing likewise.
We have, for many years, been making strong representations on the state of public finances. The fiscal deficit concerns us deeply because of the potential macroeconomic consequences it may exert on taxation, the interest rates, inflation, national reserves, currency stability and other factors. These, in turn, affect national competitiveness, consumption patterns and the momentum of commercial activity.
The Chamber contributed actively in the discussions that took place both before and after the Budget. During these discussions, we held strongly to our convictions that the country cannot afford to sustain a heavier tax burden. The fiscal deficit cannot be eliminated by increasing taxation but through economic expansion and the curbing of public expenditure. Expansion in the real economy does not take place unless the right incentives are made available for the stimulation of investment and employment creation. Prior to the Budget, we suggested to Government, both publicly and privately, to control public expenditure whilst reducing the tax burden on workers and entrepreneurs. However, although our suggestion was listened to, it was not taken on board. The Chamber shall, therefore, continue with its representations aimed at economic consolidation and efficiency.
As you are well aware, for the first time this year, the private sector Constituted Bodies gave their preliminary reactions to the Budget in a joint press conference which took place here at The Exchange on Budget day. This experiment was highly successful, particularly because it was very well attended by the press who were eager to discover how we were going to react. Our comments were broadcast widely and in a very comprehensive manner indeed. We augur that this experience will continue, and that future events will also incorporate the Unions. In that manner, our views would cover a much wider spectrum of civil society and we would be contributing more actively towards the realisation of the social pact for the ultimate benefit of the country and the entire Maltese population.
At this point, allow me to make a brief reference to the Euro and Malta’s joining of the Second Exchange Rate Mechanism (ERM II). A number of eye-brow raising statements have already been made in this regard. We strongly believe in the merits of participating in the Economic and Monetary Union (EMU) but are well aware of the inherent risks involved. The latter are mainly associated with the economic discipline that the country would have to adhere to. Therefore, we maintain that Malta should only consider adopting the euro when it is healthy enough and suitably positioned to satisfy the convergence criteria. In our opinion, the country has not adequately addressed its public expenditure problems and it would be most inopportune for Government to make any commitments in this regard before it grasps the solutions to the country’s financial predicament.
Strengthening our Chamber
Our activities and efforts, this year, were not, however, solely directed at Malta’s future within the European Union and the country’s financial challenges. Upon my election to this post, I immediately declared my determination to introduce, with the help of my fellow Council members, the changes that were necessary for the modernisation of the Chamber’s internal rules and functioning. It was in the interest of the very Chamber and its members that this institution remained active, forward-looking, and prepared for all the challenges facing our nation. It is a fact that the work-load and the overall obligations of the Chamber towards the country have increased dramatically over the past years. This stemmed from the fact that our commitments as members of the commercial community have expanded. Besides, the Chamber is being consulted by Government and other authorities on a multitude of issues with more frequent regularity.
During the past twelve-month period, we have taken the necessary steps to ensure that we instituted all those changes which were deemed necessary. At this point, I wish to thank the Chamber Vice-President, David G. Curmi who was entrusted, last year, with forming and chairing a special committee to study the Chamber’s Statute and effect the necessary amendments. In this regard, the Committee consulted legal experts, the Council, the Chamber Officers and the Trade Section Executive Committee members.
The primary change that was agreed to during the Extraordinary General Meeting, held on October 30 last, was an alteration in the formal title of the Chamber. Consequently, the senior private sector institution shall henceforth be known as the "Malta Chamber of Commerce and Enterprise" thereby encapsulating all forms of modern business.
I specifically mentioned the establishment of Economic Groups [as opposed to the former Trade Sections]. These shall constitute a new and powerful structure within our institution. In all, there shall be six Economic Groups in all to cover every angle of commerce and enterprise on these islands. I augur that this important development would be nurtured properly allowing it to serve as an initial step towards greater unity and co-operation between the private-sector organisations in this country. For example, the Tourism and Leisure Economic Group may co-ordinate the functions of the various local associations and bodies thereby creating a unified voice to represent the needs of this sector and the country. Similarly, this applies also to the manufacturing industry.
Allow me, therefore, to also thank all those members who understood the great importance of these changes and attended the last Extraordinary General Meeting to manifest their support towards the Chamber enabling it to face today’s realities and those of the future with valour and determination.
Conclusion
I am at the twilight of my term as Chamber President. During this brief time-span I endeavoured, with the assistance of my fellow Officers and Council members, to lead this institution well ahead. Regrettably, we have not managed to conclude all that we had started and it was precisely for this reason that we sought to amend our Statute to prolong the maximum tenure of Officers and Council members. I declared that these amendments would have no effect whatsoever on my Presidency because I genuinely felt that it was the most honourable way to proceed.
I held strongly to my promise despite the considerable pressure I endured to re-contest the Council elections which shall commence in a few minutes’ time. I augur every success to the incoming President, Officer Group and Council who shall lead this esteemed institution next year. We envisage a year of intense activity during 2004 and further historical milestones that are expected to impact on the work of our institution. Above all, I sincerely augur that the work we have started this year, and which I referred to amply throughout my address would be seen through in the interest of the nation and the commercial community.
Fellow members, the road ahead is not devoid of some obstacles we must face. But, nevertheless, I remain ever confident because I know that the Malta Chamber of Commerce and Enterprise is now already geared for the future. Above all, I am positive because I believe in the prowess of the local business community and the Maltese population. The challenges ahead are massive but if we face them with good will, courage and our entrepreneurial spirit I am more than optimistic that we will make a successful reality from our country’s integration with the European Union. At the same time, I strongly believe that the other Member States will also gain from our accession to the Union. Likewise, our Mediterranean neighbours will also benefit for our momentous step because, in our country they shall find an open door to the European Single Market.