BusinessToday Previous Editions

06.02.2020 9 EDITORIAL BusinessToday is published every Thursday. The newspaper is a MediaToday publication and is distributed to all leading stationers, business and financial institutions and banks. MANAGING EDITOR: SAVIOUR BALZAN EDITOR: PAUL COCKS CONTRIBUTING JOURNALIST: MASSIMO COSTA BusinessToday, MediaToday, Vjal ir-Rihan, San Gwann SGN9016, Malta Newsroom email: bt@mediatoday.com.mt Advertising: afarrugia@mediatoday.com.mt Telephone: 00356 21 382741 R obert Abela has hit the road running since becoming prime minister three weeks ago, taking decisions that have sent important messages on good governance. It remains imperative for the new prime minister to maintain this momentum with the introduction of structural changes that ensure good governance is not a passing fad that depends on who occupies the top job. Malta's reputation abroad has suffered and tackling this had to be a key priority for Abela and his government. e decisions, including the resignations of a minister and the police commissioner, have helped inject a sense of normality and stabil- ity, which allow decisions to be taken in a se- rene environment. is does not mean it is mission accom- plished. Change must continue and good governance failings must continue to be ad- dressed with vigour. Abela must not rest on his laurels and has to remain vigilant in the best interest of the country. is focus on good governance is one test that Abela faces but it is not the only one. e economy is another major test the new prime minister faces. A self-inflicted eco- nomic slowdown characterised the closing weeks of 2019 and its impact still has to be evaluated over the next few months. ere are external factors that can cause uncertainty such as Brexit negotiations, the trade war between the US and China, the coronavirus and a myriad of other global problems that may have an impact on Malta's open economy. But there is also the reality of adjustment to new governance standards. Ironically, some of the important and necessary decisions Ab- ela's government took may have sent jitters down the spine of some economic operators. e decision to abruptly terminate the ridic- ulous contract awarded by the Malta Tourism Authority to former minister Konrad Mizzi was good but its impact on confidence cannot be overlooked. It may have sent a signal that government has no respect for contractual obligations, which may create uncertainty among opera- tors dealing with public entities. Within this context, it is important that such decisions are explained and motivated by good, legal and ethical reasons. e same is true for the hospitals concession deal. Abela did well to create a working group to analyse and undertake a review of the con- tractual obligations between the government and Steward Healthcare. It is also good that government remains open to any eventuality and decisions are tak- en in the best interest of the country. But if the context is not explained and if the review process is not transparent it could create shockwaves among private operators wanting to participate in public tenders. ese jitters may cause private enterprise to adopt a wait and see attitude, which could negatively impact private investment. More importantly, any changes in the coun- try's planning strategy that could stop or re-dimension major private projects, could also hit confidence. It is not easy maintaining this balance be- tween doing the right thing and allowing things to proceed as they have always done. An adjustment to the new reality is necessary and this is why government must be open about its intentions. ere are sectors of the economy where a new impetus is required to get things go- ing. One such example is the aviation sector, where a masterplan on the best use of land and resources in and around the airport has not yet seen the light of day. A greater effort is required to attract foreign direct investment. Ensuring the economy remains buoyant is important because if it falters, the headline figures will start to suffer. A slowdown could impact the income from taxes and this could lead to an impact on the deficit. Abela will not want to see the public sector surplus of the past few years turn into a defi- cit on his watch. e situation is nowhere near problematic at this stage and the country has built a comfort- able cushion to moderate any negative impact. In the months to come, Abela must ensure that business confidence transforms into an appetite for investment that creates jobs and leaves value added. The economic test

• Cover