Fac­ing up to chal­lenges af­fect­ing Malta’s com­pet­i­tive­ness

The Malta Business Weekly - - FRONT PAGE -

Two is­sues back, we re­ported on the EY Malta at­trac­tive­ness sur­vey as out­lined at a con­fer­ence held in the pre­vi­ous days.

We re­ported that Malta’s level of at­trac­tive­ness for for­eign in­vestors re­mains strong de­spite dip­ping some nine per­cent­age points when com­pared with the pre­vi­ous year (87% in 2016 to 78% in 2017).

The three most at­trac­tive fea­tures of Malta, ac­cord­ing to the com­pa­nies sur­veyed, is cor­po­rate tax­a­tion at first place at 88%, down three per­cent­age points from 2016, sta­bil­ity of so­cial cli­mate which came in sec­ond at 82%, down six per­cent­age points from 2016 while telecom­mu­ni­ca­tions in­fra­struc­ture came in third place at 73%, up four per­cent­age points from 2016.

Con­cern about the “sta­bil­ity and trans­parency of the po­lit­i­cal, le­gal and reg­u­la­tory en­vi­ron­ment” which had dropped 15% from 2015 to 2016, has dropped a fur­ther 12% be­tween 2016 and 2017, down to sev­enth place.

Among the weak­nesses that were iden­ti­fied, the labour mar­ket was pointed out as one of the main chal­lenges Malta is fac­ing and will be fac­ing in the com­ing years.

Forty-one per­cent of those in­ter­viewed in the sur­vey iden­ti­fied tal­ent short­age as the most se­ri­ous threat that could im­pact their plans to in­vest in Malta.

Helga El­lul, noted en­tre­pre­neur, said there are just not enough peo­ple to fill the needs of in­dus­tries. Nor do the right skills ex­ist.

Clyde Caru­ana, head of Job­sPlus, warned the econ­omy needs 12,500 new work­ers next year. From the 11,000 jobs cre­ated last year, only 2,500 were filled by Mal­tese.

Ron­ald At­tard, man­ag­ing part­ner at EY, pointed out that Malta could look for­ward to the fu­ture with con­fi­dence as long as it had the courage, the fore­sight and the po­lit­i­cal will to move along in a chang­ing world.

Shall Malta end up like some of the Gulf states where eco­nomic growth is de­pen­dent on im­ported labour?

The whole coun­try wel­comed the agree­ment that was reached be­tween the govern­ment and MUT in the past days, not just be­cause the threat of a strike to have taken place yes­ter­day was averted but also be­cause the teach­ers have fi­nally been given a sub­stan­tial in­crease in wages which has eluded them for many long years.

We hope this agree­ment is com­ple­mented by a se­ri­ous and cred­i­ble push to fur­nish the coun­try with school leavers with the skills needed by Malta’s present and fu­ture econ­omy. Ev­ery school leaver who leaves school with in­ad­e­quate skills will be­come a drain on the coun­try’s so­cial ser­vice and a missed chance to take part in an econ­omy that is grow­ing apace.

The work­place is rapidly chang­ing and the skills that were ad­e­quate up till yes­ter­day are now more or less use­less in this world of com­puter skills and au­to­ma­tion. Thank­fully, our chil­dren are now fa­mil­iar with ICT through an early fa­mil­iar­iza­tion with com­put­ers and tablets. But they must be helped to up­grade their skills from play­ing around to us­ing ICT pro­duc­tively.

At the other end of the scale, the re­mu­ner­a­tion be­ing given, mostly to for­eign labour, must be up­graded if Mal­tese na­tion­als are to be at­tracted to the jobs now be­ing mostly held by for­eign­ers, es­pe­cially in the cater­ing in­dus­try.

As to the for­eign­ers al­ready here, they must be helped to in­te­grate more in Malta and to up­grade their skills as well. Oth­er­wise, we risk hav­ing a sub-pro­le­tariat which will al­ways be down­trod­den.

The govern­ment must come up with a cred­i­ble and ra­tio­nal plan with re­gards to fu­ture skills needed and to im­ple­ment this across the board.

It is im­per­a­tive that all sec­tors in the coun­try ad­dress the un­cer­tainty ex­pressed by in­vestors as well as the un­cer­tainty be­ing felt by Mal­tese who are feel­ing left out in an econ­omy where for­eign­ers get the jobs and the prices of rented prop­erty es­ca­late.

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