Editorial | Intelligent bureaucracy

Businesses wanting to open shop in Malta have to deal with unwieldy bureaucracy when interfacing with regulatory agencies and public entities.

Many times, information and documentation requested by one entity is then requested by others that operate in isolation from one another.

This causes unnecessary red tape, duplication or triplication of work and wasted resources that can be deployed elsewhere or more fruitfully.

This point was raised yesterday by Rudolph Psaila, who heads the public-private partnership Finance Malta, during a discussion on government’s economic vision for the next 10 years. The consultation document is currently being discussed with stakeholders.

Psaila called for a seamless approach in which investors that are required to give information about themselves and their operations do so once and a central hub will allow different regulatory agencies to access the data.

He was reflecting the lament often made by business operators in their dealings with multiple agencies.

Speaking at the same event, Malta Financial Services Authority acting CEO Christopher Buttigieg, questioned whether the time was ripe for consolidation among certain regulatory authorities that had overlapping functions.

The points raised provide food for thought. While consolidation in some areas may be salutary, in others it risks diluting the specialised focus required to provide good governance in the sector.

Within this context careful consideration has to be given to authorities with specialised roles like the MFSA, the FIAU and the Central Bank of Malta that may have overlapping functions but have specific roles within the country’s regulatory makeup.

However, even in these cases there may be scope for information sharing that minimises bureaucracy. Information collected by the MFSA during its due diligence exercise can easily be shared with the FIAU and vice versa.

To do this, reporting and information-gathering mechanisms have to be streamlined and digital platforms have to be able to communicate between themselves.

Greater coordination and interoperability between the different agencies is increasingly becoming a necessity to improve efficiency and ensure competitiveness.

But this inter-agency coordination is also important to strengthen good governance and the rule of law.

Criminals and people with ill-intent often exploit the void created when public institutions adopt silo mentalities. The fight against financial crime and cyber terrorism will increasingly take on greater importance in the years to come. The cross-border nature of these crimes will require cooperation between different countries but also between agencies within the individual states.

Good governance is one of the pillars on which the government is basing its economic vision for the next 10 years. This is crucial because legitimate businesses require a level playing field, fairness and robust regulations to be able to flourish.

Within this context adopting some form of regulatory sandbox where different agencies cooperate and share information is a must.

How this is done will require input from the stakeholders since the expectations and demands of each may be different.

Even though the term bureaucracy conjures up negative images, it is necessary to ensure that proper controls are in place and actions can be traced, especially in the public sphere.

What Malta needs as it goes forward is intelligent bureaucracy underpinned by technology and which does its function without stifling economic growth or innovation.