Issue link: https://maltatoday.uberflip.com/i/1482386
maltatoday | SUNDAY • 23 OCTOBER 2022 8 INTERVIEW 'Attractiveness' is in the eye of the investor The recent EY-Partheneon Mal- ta Attractiveness Survey sug- gests that investor confidence in Malta seems to have bounced back, since hitting an all-time low over the past two years. Nonetheless, it also points to- wards several 'concerns': in- cluding possible future changes to Malta's taxation regime; and the impact of economic growth on the country's environment, and infrastructure. This seems to echo recent calls by the Fi- nance Minister, that Malta needs to 'change its economic model'. Would you say, then, that the results of your survey validate that suggestion? It's an interesting way of look- ing at it: but I see what you mean. In a sense, you're right to point out that connection… because it's true that the survey delves into the issues you mention. But let's take a step back, and look at what the survey was trying to gauge. When we talk about 'investor confidence': what are we talking about, exact- ly? Very simply, it's an answer to the question: 'Do you find Malta attractive, or unattractive?' Historically, Malta used to en- joy very high levels of confidence, in that regard. If you go back around 10 years, for instance: foreign investors would say [in answer to the above question] that part of what made Malta at- tractive, was its people: the fact that we are English-speaking; that there were certain skill-sets present on the island, and so on. Now, however, 'skills' are among the challenges identified by the survey. If you look at the 'People' section of the question- naire – and compare it to pre- vious years – you will note that certain factors that used to be at the top of the list, are now in the middle. 'Flexibility of labour'; 'local la- bour skills'; 'labour costs'… these have all moved down, in the list of positive factors; and anoth- er area that has deteriorated, in recent years, is the 'Stability of Transparency of Legal and Reg- ulatory Environment'. But to answer your question more directly: our survey also asked about the "environment and social factors that Malta should prioritize to increase in- vestment attractiveness." The answers speak for themselves: "Quality of built and urban envi- ronment, including recreational spaces"; "Preservation of rural and natural areas"; "Green spac- es outside urban areas"… So yes: the survey does indicate that the 'quality-of-life' issues Maltese people so often com- plain about – traffic; overdevel- opment; the lack of open spaces, etc. – are beginning to feature, also as a factor influencing in- vestor confidence in Malta… Another thing that emerges – from the same 'Environment' section – is a concern with 'waste management'; 'water quality and conservation'; and other issues pertaining to Mal- ta's infrastructure. Doesn't this also tie in with an economic policy that depends so heavily on population growth? I'm reluctant to answer that, because I don't want to be mis- interpreted as saying that 'I don't want foreigners in the country'. On the contrary: I think that what Malta has achieved, by bringing in more foreigners, has been very positive; it has trans- formed us into a more diverse, cosmopolitan country. Now: could we have done a better job of integrating those foreigners, and making them feel more part of the Maltese community? Yes, of course I think that… The issue goes beyond a mere concern with 'foreign- ers', though. It's also a num- bers-game. It is hardly surpris- ing, for instance, that Malta experienced power failures in the peak summer months. Our population has almost doubled in 20 years; and so, too, has 'demand for electricity'. That concern would remain the same, even if Malta was popu- lated only by Maltese citizens… Exactly, I couldn't agree more. In fact, in our surveys we never refer to 'Maltese citizens'; we only ever talk about 'people re- siding in Malta'… and I think that's what we should strive to achieve. But still, the question remains. In a county which is enjoying full employment; and which is so small – we even make a point about Malta being 'one of the most densely populated coun- tries in the world' – shouldn't we be trying to change our econom- ic metrics, in terms of what we are trying to achieve? Let me put it another way: historically – and probably, be- cause of the size of the country – we have always emphasised 'employment', only in terms of 'the number of jobs'. And it's the same with tourism: we tend to measure success, in the tour- ism industry, by the 'number of tourists arriving each year'. It's always 'numbers, numbers, numbers'… in a nutshell, 'quan- tity'. But should quantity be the only measure? Because as you point- ed out: numbers have repercus- sions. Not only on roads, traffic, waste-management, and so on; but also, on our social services. Schools, for instance. Are there enough of them, to cater for the growing population? And even- tually, the question will extend to the health services, too. Will one hospital continue to be able to cope, with a much higher de- mand? And the same, naturally, goes for retirement homes, and so on. So if you take a long-term ap- proach to Malta's economic development – which is what we try to do (and let's face it: it's not exactly 'rocket-science', either) – the implications are inescapable: yes, a growing pop- ulation – regardless whether of 'foreigners', or 'Maltese' - is go- ing to place further strain on our infrastructure. But then, the question becomes – and it's not for me to answer – 'what is our vision, for Malta'? It might not be your call to make: but how would you an- swer that question, if it was? Well: let us, for argument's sake, imagine that one possible vision for the country, was to make Malta 'the best place to live in the Mediterranean' – for anyone: Maltese, or foreign. I'm not saying it's the only vision; but let's say we make that our objective, for now. How, then, do we go about achieving it? Perhaps – given everything that emerges from this survey, RONALD ATTARD, country-managing partner for EY Partheneon, argues that Malta needs to rediscover what truly makes it 'attractive', to foreign investors and residents alike PHOTO: JAMES BIANCHI / MALTATODAY Raphael Vassallo rvassallo@mediatoday.com.mt