Issue link: https://maltatoday.uberflip.com/i/1482086
2 NEWS maltatoday | WEDNESDAY • 19 OCTOBER 2022 2 NEWS PRIME Minister Robert Abe- la has proposed that the late Nationalist MP Robert Arri- go, who passed away Tuesday morning at 67, be honoured with Malta's highest award, the Ġieħ ir-Repubblika. But he turned down sug- gestions that the late jour- nalist Daphne Caruana Galizia should be honoured with a national memorial, five years since she was as- sassinated, when asked by MaltaToday. "I have already been asked this question... I believe the way we pay tribute to her memory is through the behaviour we show towards her family on a daily basis..." Abela had already said he would not attend any of the Daphne Caruana Galizia memorial events occurring over the weekend on the an- niversary of her death. Abela was instantly forth- coming in proposing that the late Robert Arrigo, a former deputy leader of the PN who served by the side of embattled former leader Adrian Delia, be honoured with a Republic Day honour. Both Abela and PN leader Bernard Grech were in Val- letta to address the EY Malta Future Realised conference, where they dedicated their speeches to the memory of Robert Arrigo. Republic Day honour for Arrigo, but no monument for Caruana Galizia MATTHEW VELLA MALTA'S investment attractive- ness has bounced back to its 2020 ratings at 58%, according to the annual survey carried out by EY. Carried out just after the coun- try was taken off the FATF grey list in June 2022, EY-Parthenon's 18th Malta Attractiveness Survey also revealed a corresponding improvement in the decrease in number of respondents who ex- pressed the view that Malta 'is not attractive'. "This bounce-back in confi- dence should be welcomed by investors and policymakers alike but, while perceptions have im- proved, it is worth noting that the rating still falls short of the very high confidence levels achieved prior to 2020," Ron- ald Attard, EY Malta managing partner, said. As in previous years, corpo- rate taxation (71%) is once again viewed as the parameter that most existing foreign investors think is attractive. The second-strongest param- eter is the stability of social cli- mate (69%), an increase of 11 points compared with 2021. Tel- ecommunications infrastructure (68%), another strong parame- ter over the last few years, ranks third on the scoreboard. The stability and transparency of the political, legal and regula- tory environment, a parameter that used to score highly on Mal- ta's attractiveness scoreboard, is now seen to be attractive by 31% of respondents, up 14 points from 2021. While 41% still state that it is not attractive, this compares with 64% in 2021, at the time of Malta's greylisting. The three parameters that cover labour, previously ranked fourth to sixth on the attractive- ness scoreboard, are now in sixth to eighth position. In 2022, they are the only parameters that have seen percentage declines over one year. The attractiveness of labour costs (35%) saw the biggest de- cline, with a 12-point decrease, followed by local labour skills level (40%), which decreased by 10 points, and flexibility of la- bour legislation (41%), which de- creased by 4 points. Biggest risks facing Malta's FDI attractiveness With corporate taxation ranked as Malta's strongest FDI param- eter, the changes brought about by international tax policy de- velopments are considered by 58% of respondents to be Malta's greatest risk for the next three years. These are followed by skills shortages (54%), banking chal- lenges (38%), cost competitive- ness (36%) and reputational con- cerns (36%). Only 5% believe the war in Ukraine will affect Malta's FDI attractiveness. A majority (69%) of existing FDI companies surveyed still believe their future is in Malta. While the last year has seen a decrease in "no" responses, the number of "don't know" responses has increased, with many respond- ents commenting that, in today's fast-changing economic and geo- political environments, a 10-year prediction has become increas- ingly difficult to make. Skill challenges, Ukraine effect Companies' ability to retain specialised personnel has re- mained high and in line with the last year and pre- pandemic lev- els. However, because of the coun- try's economic expansion, Mal- ta's skill supply has been unable to keep up with increasing de- mand for specialised skills. In 2022, 66% reported not being able to find the required spe- cialised skills in the local labour market. However, this is a slight improvement on the last year, which indicates that the chal- lenge is being tackled on several fronts and, positively, not wors- ening further. A majority (69%) of existing FDI companies sur- veyed still believe their future is in Malta. While the last year has seen a decrease in "no" respons- es, the number of "don't know" responses has increased, with many respondents commenting that, in today's fast-changing economic and geopolitical envi- ronments, a 10-year prediction has become increasingly difficult to make. Respondents were asked how their financial performance is currently being impacted by var- ious external factors. The largest impact on financial performance was due to increased costs (ex- cluding logistics) as a direct result of COVID-19, which im- pacted 66% of investors to a large or some extent. Sixty percent were impacted as a result of increased operating costs due to inflation following the war in Ukraine. 58% were impacted due to increased logis- tic costs as a result of COVID-19 and ongoing supply chain chal- lenges. On the other hand, 29% are ex- periencing a loss of revenue from source markets as a direct result of the war in Ukraine. Greylist reversal lifts investors' mood, now concerned about tax, wages and labour supply 2014 2015 2016 2017 2018 2019 2020 2021 2022 90 80 60 40 20 0 10 70 50 30 Yes No Don't know 79% 15% 84% 11% 87% 78% 74% 77% 62% Source: all 2014–22 respondents. 58% 37% 17% 46% 6% 5% 7% 6% 11% 10% 16% 15% 8% 25% 13% 30% 13% Attractiveness Source: all 2022 respondents. Challenges faced by expats to build a long-term future in the country 30% 31% 21% Some extent Little extent Don't know Not applicable Large extent Cost of housing and living Ease of process and cost of bringing non-EU nationals to Malta 36% 43% 13% 18% 14% 14% 8% 30% 40% 12% 4% Quality and availability of recreational infrastructure (parks, cultural and sports) 38% 12% 25% 7% 18% Quality of international schooling and private health care for professionals 33% 12% 28% 24% 3% Source: all 2022 respondents. Challenges faced by expats to build a long-term future in the country 30% 31% 21% Some extent Little extent Don't know Not applicable Large extent Cost of housing and living Ease of process and cost of bringing non-EU nationals to Malta 36% 43% 13% 18% 14% 14% 8% 30% 40% 12% 4% Quality and availability of recreational infrastructure (parks, cultural and sports) 38% 12% 25% 7% 18% Quality of international schooling and private health care for professionals 33% 12% 28% 24% 3% Source: all 2022 respondents. Challenges faced by expats to build a long-term future in the country 30% 31% 21% Some extent Little extent Don't know Not applicable Large extent Cost of housing and living Ease of process and cost of bringing non-EU nationals to Malta 36% 43% 13% 18% 14% 14% 8% 30% 40% 12% 4% Quality and availability of recreational infrastructure (parks, cultural and sports) 38% 12% 25% 7% 18% Quality of international schooling and private health care for professionals 33% 12% 28% 24% 3% Factors impacting ability to attract and retain talent from overseas Robert Abela dismisses suggestion that Daphne Caruana Galizia should be honoured with a national memorial Robert Abela