Maltas attractions as an
Prime Minister Eddie Fenech Adami addresses last weeks
trade and investment event held at the Malta High Commission in London.
While citing a number of success stories in the area, Fenech Adami discusses
Malta attractions as an investment location for UK and EU citizens and
government policies designed to boost the crucial economic sector
It is indeed a pleasure for me to meet with you all today
to discuss Maltas advantages as an investment location.
Over the past decade and a half, successive Maltese governments have
adopted policies specifically geared to tapping the countrys full
potential as a competitive business location, ideally suited to servicing
Europe, North Africa and the Middle East. This included major investment
in Maltas physical infrastructure in the late 1980s and 1990s.
The result is that Malta now boasts of a state-of-the-art telecommunications
system, an effective energy generation and distribution infrastructure,
an efficient Freeport and highly-developed aviation and marine communications
with the European mainland as well as North Africa.
There was, of course, major investment in our non-physical infrastructure.
Foremost in this process was our relationship with the European Union.
Malta has benefited from a long-standing Association Agreement with
the European Union. This is an agreement that worked well over the past
thirty years but in todays context is just too limited in its
benefits. Malta formally opened accession negotiations in February 2000
and, as you are aware, these negotiations were concluded successfully
at Copenhagen last December, and, accession is expected on 1 May 2004.
EU accession is Maltas best option for economic growth, since,
apart from automatic entry into the European market, EU membership will
provide the long-term security and stability that is the prerequisite
for growth in todays increasingly inter-dependent globalised economy.
Manufacturing is one of the main pillars of our economy, employing approximately
one fifth of the Islands labour force and accounting for about
a quarter of Maltas GDP. Our industrial structure, in line with
the prevailing trend in other countries, has experienced a major shift
we have progressed from a stage where Malta was typically a low-cost
assembly location, to our present status as an established high-productivity
In terms of sectors this process has seen us move away from textiles
to the production of electronic components, parts for the automotive
industry, precision engineering, the production of medical and pharmaceutical
products and products and services in the field of information technology.
Some of the most successful companies operating from Malta include a
fair number of British names, such as Dowty and De La Rue. Another example
is Motherwell Bridge, a British company that has established an important
presence in Malta from where it provides metal fabrication and other
engineering services in support of contracts in various North African
Malta can also lay claim to a growing financial services sector, increasingly
geared towards providing a wide range of services in support of business
activity within Europe, North Africa, and beyond. Today, many companies
operate from Malta to provide a wide range of these services to the
international market. The acquisition of Maltas largest bank by
HSBC is a significant expression of confidence in our financial sector.
However, these are not the only types of services for which Malta is
an ideal base. Equally promising, in terms of their growth potential,
are the many service activities linked to our traditional maritime vocation.
These include complex conversion jobs on specialised vessels for the
oil industry, the servicing of super yachts, ship repair at the Malta
Drydocks, the operation of cruise liners with Malta as their base and
the provision of various services in direct support of the oil industry.
Much activity is also centred in the Malta Freeport, which has now become
one of the busiest transhipment harbours in the Mediterranean.
We are now working to extend the services we offer to the maritime sector
to aviation. We are confident that aviation services have all the potential
to be developed on equally successful lines. The Malta International
Airport has recently been privatised and its management is benefiting
from the experience of Europes most successful aviation hub, that
of Vienna. Additionally, Lufthansa Technic has established a joint venture
with Air Malta to provide aircraft servicing facilities through Lufthansa
Technic (Malta) which is already in operation.
All these developments would not have been possible were it not for
the versatility and quality of our human resources. These constitute
a largely English-speaking workforce that is cost-effective and competitive
in terms of its ability to add value and deliver a high quality output.
My Government continues to invest heavily in the Maltese educational
system to ensure that these standards are maintained, and that our skills
evolve in line with business and technological developments.
The productivity of our labour force has also been enhanced by the long-established
practice of skills transfer a direct benefit of Maltas
long tradition of attracting substantial foreign investment in practically
all sectors of manufacturing activity. This is highlighted in the considerable
experience and success that Maltese management has achieved in running
the production arms of foreign multinational companies.
Over time, many foreign companies have consolidated their positions
in Malta and have further expanded their investment, moving away from
simple production runs to higher value-added operations. The adaptability
and level of competence of Maltese management have been key elements
in making such a transition possible.
These positive attributes are backed by other elements of non-physical
infrastructure. These include an efficient tax system and a credible
legal framework. Company law in Malta is based on British and EU practice
and all relevant legislation is also published in English.
The business support infrastructure available to companies seeking to
operate from Malta includes the three competent elements of what we
term Malta Enterprise.
The Malta Development Corporation responsible for the
attraction of foreign direct investment, the administration of incentives
under the Business Promotion Act and the provision of factory space;
The Malta External Trade Corporation responsible for providing
assistance to companies seeking to tap new markets; and
The Institute for the Promotion of Small Enterprises which
supports small and medium sized enterprises in various capacity building
Maltas economic outlook is not only positive; it is now set for
the far greater opportunities provided by our forthcoming membership
of the European Union.
To date, Maltas success has depended largely on the stability
and security that has been the hallmark of our national development.
This factor will be consolidated by membership. EU membership will also
enhance Maltas trade relations with the enlarged EU, and will
provide Malta-based firms with full and immediate access to the many
other countries with which the EU has concluded free trade agreements.
EU membership will provide greater certainty for overseas investors
attracted to Malta; certainty in terms of the applicable laws, in terms
of standards and, in the near future, certainty in terms of currency.
EU membership also means the certainty of the incentive structure offered
European Union membership will also strengthen Maltas standing
in the Mediterranean, poised as we are to become the Southern
Gateway to Europe, a hub for business activity within the Mediterranean
which provides the ideal base for international companies seeking to
expand their business activity in Southern Europe and Northern Africa.
We believe that there are advantages also for companies that wish to
operate from Malta rather than in Malta. Whether
it is marketing, sales and distribution, project management, customer
training or after sales support, we believe that it can be done most
effectively from Malta and at a lower cost than most alternative solutions.
I thank you for attending todays event during such an exciting
period in Maltas development. I welcome initiatives such as these
that strengthen the already excellent ties that exist between our two
countries and their respective business institutions.
My parting message is a simple one. My Government and my country are
ready to help you do more business in our region - I encourage you to
take maximum advantage of this profitable reality.