Issue link: https://maltatoday.uberflip.com/i/1544097
15 maltatoday | SUNDAY • 29 MARCH 2026 OPINION Economist Towards a more structured approach to risk and resilience in Malta JP Fabri THERE is a quiet paradox at the heart of modern financial gov- ernance. Every licensed financial institution in Malta is required to maintain a risk register, map- ping threats, assessing probabil- ities, and outlining mitigation strategies. Yet at a national level, where the stakes are infinite- ly higher, we operate without a single, coherent, publicly articu- lated view of risk. We are operating in an envi- ronment defined by overlapping shocks. Geopolitical tensions are no longer distant events but drivers of energy prices, inflation, and uncertainty. Cyber risks have evolved from technical concerns into systemic vulnerabilities that can affect entire sectors. Climate pressures are increasingly visible, not just environmentally but eco- nomically, through food systems, infrastructure strain, and insur- ance costs. Supply chains, once assumed to be efficient and reli- able, have shown how fragile they can be. For a small, open, and highly in- terconnected economy like Mal- ta, these risks are amplified. The question, therefore, is not wheth- er risks exist. It is how we organ- ise ourselves to understand them better, to prioritise them, and to respond to them in a more co- ordinated way. This is where the idea of a structured, national-lev- el view of risk becomes valuable. The United Kingdom, for ex- ample, publishes a National Risk Register that provides a shared framework for understanding the most significant risks facing the country. It does not claim to pre- dict the future. Rather, it brings together different strands of anal- ysis into a single, accessible view. It identifies areas of exposure, considers potential impacts, and, importantly, supports alignment across institutions. The strength of such an ap- proach lies not in the document itself, but in what it enables. It cre- ates a common language around risk. It allows policymakers, busi- nesses, and institutions to operate from a shared understanding. It encourages coordination rather than fragmentation. And it helps anchor longer-term thinking in a world that often rewards short- term responses. In Malta, elements of this think- ing already exist. Risk assessments are carried out across various sec- tors. Institutions are increasingly aware of vulnerabilities, whether in energy, infrastructure, finance, or the environment. There is also a growing recognition, reflected in broader strategic initiatives, that resilience must be embedded into how we think about growth. What may be missing is a more integrated framework that brings these perspectives together. Consider energy. Malta has taken important steps to shield households and businesses from volatility, particularly through subsidies. These have been effec- tive in the short term. But they al- so highlight the need for a broad- er conversation about long-term resilience. How do we reduce ex- posure to external shocks? How do we diversify? How do we build systems that are less depend- ent on external variables? These answers are implied in energy strategy documents and in Vision 2050, however I really believe that a more structured approach to risk would help frame these ques- tions more clearly. The same applies to cyber secu- rity. As Malta continues to digit- ise, the benefits are clear. But so are the risks. Financial services, gaming, and public administra- tion are all increasingly reliant on digital infrastructure. A co- ordinated view of cyber risk, at a national level, would not only improve preparedness but also strengthen confidence in Malta as a secure place to do business. Climate risk offers another ex- ample. This year we witnessed the impacts of a massive storm that hit Malta. For an island state, the implications are both imme- diate and long term. Water man- agement, coastal resilience, urban planning, and agriculture are all interconnected. Addressing these challenges requires a systems perspective that recognises how different risks interact and com- pound over time. What a structured risk frame- work offers is precisely this per- spective. It encourages us to move beyond silos and think in terms of systems. It highlights in- terdependencies. It helps identify where vulnerabilities may lie, not just in isolation, but in combina- tion. There is also an important gov- ernance dimension. A shared view of risk supports better deci- sion-making. It allows for clear- er prioritisation of resources. It provides a reference point against which policies can be assessed. And it contributes to greater transparency, both within insti- tutions and in the broader public debate. As discussions around Vision 2050 take shape, there is a clear opportunity to embed resilience more deeply into the coun- try's strategic thinking. Growth, competitiveness, and quality of life cannot be considered inde- pendently of risk. They are intrin- sically linked. A more structured approach to risk would complement this vi- sion. It would provide a founda- tion upon which long-term strat- egies can be built. It would ensure that aspirations are grounded in a realistic understanding of the challenges ahead. It would also support a more mature economic conversation. Too often, debates focus on outcomes without fully engaging with the risks that may influence them. We speak about growth targets, sectoral strategies, and policy initiatives without always considering the broader context in which they operate. A clearer articulation of risk helps bridge this gap. It connects ambition with reality. Importantly, this is not about being overly cautious or risk-averse. On the contrary, understanding risk is what ena- bles better decision-making and, ultimately, more confident ac- tion. It allows countries to take calculated risks, to invest in new areas, and to innovate, while be- ing aware of potential downsides and prepared to manage them. Resilience, in this sense, be- comes an enabler rather than a constraint. Malta has demon- strated, over time, an ability to adapt and respond to changing circumstances. This adaptability is one of its strengths. The next step is to complement this with a more structured, forward-look- ing approach. In an increasingly complex world, coherence can make a sig- nificant difference. It can reduce uncertainty, improve coordina- tion, and enhance the overall ef- fectiveness of policy. In a world where risks are evolv- ing, the way we think about them must evolve too. In an increasingly complex world, coherence can make a significant difference. It can reduce uncertainty, improve coordination, and enhance the overall effectiveness of policy