By Julian Manduca
According to soon to be published statistics, foreign direct investment has increased over the past months by a considerable 30 per cent. The news had already been announced on Saturday when Prime Minister Lawrence Gonzi told the media that government’s work has led to a 30 per cent increase in foreign investment over the previous two years. The announcement, however, was met with scepticism by Labour spokespersons who told The Malta Financial and Business Times they had yet to see evidence of a confirmed increase in foreign investment.
This newspaper asked the Prime Minister for a list of the new investors’ names and the sectors they will be operating in, but his communications co-ordinator replied to say the statistics indicating the increase would soon be announced by the National Statistics Office.
The communications co-ordinator said the Prime Minister was aware of the increased investment through the finance ministry, which he heads.
Labour spokesperson for industry Chris Aguis has expressed doubts over the Prime Minister’s claim and told this newspaper, “I believe the government is expecting some investment in the pharmaceutical sector, and I have heard of two Spanish companies and one Swiss, I think, that have shown willingness to invest, but I have no information that indicates a 30 per cent increase in foreign investment.”
Expectations of foreign direct investment for Malta have been high in some quarters ever since Malta joined the EU, but prior to the Prime Minister’s announcement last weekend the prospects were not encouraging.
The Malta Financial and Business Times also contacted Dr Karl Chircop, Labour spokesperson for industrial affairs, who said he had no indication that investment from abroad was on the up and called on the Prime Minister to publish the names of companies that were investing.
“If the Prime Minister tells us which companies have invested we would welcome the news. I have an increasing number of people coming to me asking for work.”
Chircop told this newspaper that he was faced with an increasing number of people that were giving up looking for work. “That is a bad sign, usually people try and try and eventually find something, but now after coming to me once or twice, I contact them only to be told they have stopped looking,” he said.
Recent announcements of investment by Farsons, Dedicated Micros, Foster Clarks have been trumpeted by government over the past weeks, but only Dedicated Micros is a subsidiary of a foreign company.
Economist Edward Scicluna pointed out that it was “important to distinguish between green-field investment, mergers and acquisitions, modernisation of plant and machinery, as well as the privatisation of state-owned-enterprises. All private investment adds to economic activity and economic growth.
“Some type of investment as part of restructuring programmes is important for protecting current jobs; other, such as green-field investment creates additional ones. Creating favourable conditions for FDI should be at the top of Malta’s economic strategy. Measuring the volume of foreign direct investment is useful because it shows the confidence which the world at large has in Malta's future potential.”