Author: Mel Chamber

The Malta Chamber of Commerce, Enterprise and Industry is very worried about the current situation that the country is in, particularly, though not only, about the nationwide power outages experienced continuously over the past days which have left business and the general public in paralysis.

In view of this, The Malta Chamber has asked the MCESD Chairperson to convene, with urgency, a meeting amongst all the stakeholders to discuss this situation collectively as a nation. This current state of play cannot persist and worst of all repeat itself – the right decisions and timely investment need to be taken now. This country needs to have a long term economic and social vision that goes beyond the political spectrum.

In the past days, The Malta Chamber showed its concern and worries on the way the country is being led. This goes beyond the power cuts being experienced continuously. There is the urgent need to discuss the way crucial issues which effect the nation as a whole are being handled. This can only be achieved through a responsible dialogue with all social partners collectively. The business community is calling upon the government to act now before it is too late.

The Malta Chamber in collaboration with Bank of Valletta plc organised a conference to discuss the current standing of the Maltese economy and where it should be aiming to go.

The Malta Chamber Deputy President Nick Xuereb highlighted the main pressure point the labour market is experiencing, the impact of inflation and interest rates, the importance of tax reforms, and the importance of pushing the boundaries. “We are in a permacrisis state, and we must act diligently and in a timely manner to navigate and mitigate the challenges that lie ahead,” he said.

Bank of Valletta plc (BOV) CEO Kenneth Farrugia emphasised the importance of sustainability and putting more weight on ESG in business and operational models, so that Malta remains competitive in attracting more foreign investment.

This came in his speech during a business seminar organised by The Malta Chamber of Commerce, Enterprise and Industry in collaboration with BOV, titled “The Maltese Economy: 2023 & Beyond”. During the seminar, various key stakeholders discussed the current state of the Maltese economy and gave interesting insights on the matter.

Mr Farrugia highlighted the importance of sustainability and ESG principles to support the country’s sustainability ambitions. “We noticed two extremes when meeting clients: those who have strategically embraced ESG in their business models, whilst others have a very limited understanding of sustainable development goals and ESG ambitions,” he said.

“Our collective contribution to economic growth should be driven by sustainable growth which in turn will strengthen the country’s value proposition making it more attractive for foreign direct investment, which is so important for Malta and Gozo,” he added.

Mr Farrugia also emphasised that very frequently, people are driven by the idea of “what is in it for me?” He remarked that such a limitation “needs to be extended to the important consideration of the way ESG will contribute to make Malta an attractive investment destination”. In that respect, he added that Malta experiences “multiple armchair critics” that are “completely devoid of constructive solutions”.

He explained that should the industry want to sustain the growth of Malta’s economy, it needs to “take charge of the required changes” as it is “easy to criticise”, but then a backseat is often taken “when it matters most”. Effectively greenifying the economy needs to be “financed and incentivised”, and Mr Farrugia noted that everyone has a role to play in this paradigm shift which is “so important for the country in its ambitions to ensure sustainable growth”.

He added that it comes as no coincidence that the social part (the ‘S’) comes in the middle of ESG, as “everything we do ultimately revolves around our society”.

The bank’s CEO also reaffirmed BOV’s position as a “catalyst in the local economy”, through its aim to “add value to society”. He explained that it does so as it believes that in this manner, it will “create value for the customers and our bank”. “We commit to remaining supportive of the Maltese economy, and we want to be a catalyst in the business community to actively contribute and support the required changes. Events like this are stimulating discussions and providing interesting insights but these need to be followed up and events like this should not end up simply being talking shops,” Mr Farrugia continued.

Failing to act on these events would risk the industry generating a number of useful suggestions that would not be followed up on and eventually end up being fizzled out. “As a bank, we have identified those sectors we feel are behind the curve regarding ESG, and we will be supporting these sectors to embed ESG principles in their business models and operations,” he said.

During a panel discussing the future of Malta’s economy, Kevin Rapinett, Member of The Malta Chamber Board of Management noted that “the numbers do not lie”.

“Considering the challenges of the past years, we did relatively well, however, several cracks can be seen. These cracks are unfortunately present because Malta has adopted a model over the past 10 years that is solely focused on the ‘increasing numbers’ of our economy leading to a myriad of unsustainable practices,” he explained. He also made reference to Minister of Finance Clyde Caruana’s recent call to revisit Malta’s economic model, describing it as a “timely one” since it will allow for “sustainable growth when looking towards the medium and long term”.

Silvan Mifsud, Council Member of The Malta Chamber, presented some of the topics and issues that The Malta Chamber 2024 Pre-Budget document will entail. He stressed the “urgent need” to revise the current trend of increasing productivity with numbers.

BOV Senior Manager in Data Insights and Economics Malcolm Bray was another speaker in the seminar, and he outlined the salient features and latest developments of Malta’s economy. He explained how during pre-pandemic years, Malta’s economic growth was higher than in the euro area and such a pattern is forecast to continue even in 2023 and 2024. He remarked how economic growth has tended to be “job-rich”, contributing to the significant increase in the share of foreign workers and to a pronounced expansion in the size of the population. After discussing a number of other topics, Mr Bray stated that stakeholder investment is “key to ensuring the right balance is achieved”.

The Malta Chamber of Commerce, Enterprise and Industry is seriously concerned about the current state of play and the way the challenges we face as a country are being handled. The economy and the quality of life of people are suffering because of lack of foresight, poor planning, lack of transparency, weak enforcement, and slow action where action needs to be taken. The country is in a nose-dive and we persist in denial, failing to read the signs of the times. It is time to stop trying to please everyone at once and to prioritise the long-term national interest over immediate partisan interests. Government needs to listen more to the warnings voiced by people whose interests are non-partisan, and address structural issues that are impairing productivity and undermining competitiveness, the country’s attractiveness, and people’s well-being and quality of life.  The time for patched up, short-term quick fixes is over.

Year-on-year, we continue talking about the same matters in multiple fora. We register occasional improvements here and there, but the approach is uncoordinated, and the general situation continues to deteriorate because when issues are not addressed promptly and effectively, they grow bigger. The damage done in the meantime is in many cases irreversible, as evidenced by our urban landscape. The traffic situation, the power outages, the shabbiness, the lack of proper waste management and the tragedies at workplaces are just some examples of issues that The Malta Chamber is constantly harping on. These factors contribute to an erosion in the quality of life of people and make the country unattractive for high quality investors and visitors alike. Visions, strategies and reforms which remain on paper are pointless. The country’s leadership needs to step up and take the right decisions with the required urgency, however tough these decisions may be.

We need to:

1. Implement tangible measures to reduce traffic congestion, such as attaching car license fees to usage, introducing parking fees in central urban areas with fees paid being transferred into an e-mobility wallet for use of sustainable means of transport, and restricting certain congesting activities during peak hours;

2. Ensure a reliable supply of electricity that can cater for our predictably hot summers without recurring power outages;

3. Ensure proper maintenance and cleansing of public areas;

4. Ensure proper enforcement of laws and regulations in all spheres of business activity and for all residents and visitors;

5. Provide assistance to real low-income earners rather than indulge in distributing handouts;

6. Direct subsidies to businesses operating a sustainable model to help such businesses become more viable and prevalent in our economy;

7. Incentivise a shift away from labour-intensive activities towards an economic model which is not dependent on increasing the population –  the present economic model requires the importation of an additional 20,000 workers annually, which is unsustainable and is pushing the country’s infrastructure to breaking point.

The Malta Chamber reiterates that we need to overcome the illusion that because we are small, we only need to attract a small portion of the business from the global economy to succeed. Our GDP may be growing, but the country is progressing way too slowly in addressing what will increasingly mean more to people and to sustainable business models. Eventually, we will be outpaced by our competitors on all fronts. We cannot continue to grow the bottom-line GDP without a clear strategy beyond the seemingly quick-fix solution of importing foreign labour indefinitely, in the hope that this will help support the growing needs of our ageing population, not least of which is the pensions timebomb. The Malta Chamber urges Government to rise up to the challenge and act now before it is too late.

RSM Malta has renewed its commitment to The Malta Chamber by sponsoring the organisation as a Gold Partner for the 8th consecutive year. A partnership built on trust, appreciation of the work done by both entities and a mutual sharing of knowledge and expertise made possible through several initiatives. The signing of the agreement was held on Wednesday 19th July 2023, at The Malta Chamber in Valletta.

RSM Malta was the first firm of its kind to partner up with The Malta Chamber back in 2016, opening up doors for the organisation to start reaching other forms of partners apart from banks.

“Being part of The Malta Chamber, a strategic player and leader in the market, has provided us with several opportunities that continue to align with RSM Malta’s motto ‘The Power of Being Understood’. Apart from being sponsors, we have several Partners in our firm that support different committees within the Malta Chamber, while we are the main partner of the recently concluded Next Gen Leadership series organised alongside the Young Chamber Network. This series of workshops allowed us to share expertise with the young entrepreneurs that are shaking up the future of our nation,” said George Gregory, Managing Partner at RSM Malta.

As a firm, RSM Malta has always been a believer of the work that The Malta Chamber is doing and this partnership was a natural step to keep renewing year after year. This is reflected also in the support that RSM Malta’s Partners give to the organisation as well as the Young Chamber Network.

“For The Malta Chamber, the strong partnership with RSM Malta is not just an asset for us as a representative body for local leading businesses, but it is also a great asset to all our members, particularly through the expertise and knowledge shared by the firm based on the variety of sectors it operates in. We look forward to exploring further ways through which we can continue providing value for our members, hand in hand with RSM Malta and its Partners,” said The Malta Chamber President, Chris Vassallo Cesareo.

RSM Malta looks forward to continue building upon the strong relationship foundations it has established with The Malta Chamber, while it remains readily available to ensure it supports the current and future waves of entrepreneurs that are planning to design and evolve Malta’s business landscape.

The Malta Business Bureau (MBB) presented an assessment report on the European Commission’s proposal to establish a Packaging & Packaging Waste Regulation. The proposal aims to make packaging more sustainable by obliging the use of recyclable and reusable packaging, while also banning certain single-use formats such as miniature toiletry bottles and condiment sachets.

Direct feedback from businesses across all affected sectors and industries was gathered through in-depth interviews which are summarised within the report. This was presented during a meeting with the Minister for the Environment, Energy & Enterprise, Miriam Dalli.

MBB highlighted the main sentiment expressed by Maltese businesses to help contribute towards Malta’s positions in Brussels.

MBB President Alison Mizzi affirmed, “Businesses certainly agree with the main objective of the proposal. Waste represents not only a loss of resources but also leads to environmental degradation, processing and transportation costs, and spatial challenges, especially given Malta’s limited available land. It is consequently in the interest of all actors, including businesses, to introduce measures which minimise waste where possible.” Ms Mizzi added that along with the opportunities the proposal brings for more sustainable businesses, it also raises a number of challenges which MBB is assessing to facilitate implementation. 

The Minister conveyed sincere appreciation to the MBB for their diligent efforts in producing the assessment report. Minister Dalli welcomed the fact that the business sector was recognising the detrimental impact of waste on the country’s precious resources and environment. “The Government remains steadfast in its commitment to addressing any pressing issues there might be,” Minister Dalli said.

Moreover, the Minister encouraged both public and private sectors to work together towards a stronger environment and economy.

MBB Manager EU Policy (Sustainability) Gabriel Cassar presented the key outcomes of the report, highlighting aspects such as the need for further clarity in the proposal to ensure legal certainty, longer transition periods, and the need to better justify certain targets and bans from an environmental and economic perspective.

The proposal for a Packaging & Packaging Waste Regulation was issued towards the end of 2022 and is seen as one of the priority files in the EU’s green agenda. The MBB has been working closely with national and EU policymakers to put forward the views and concerns of Maltese businesses. Those interested in further information are encouraged to contact the MBB EU policy team on infobrussels@mbb.org.mt.  

The Malta Business Bureau is the EU business advisory organisation of The Malta Chamber and The Malta Hotels and Restaurants Association. It is also a partner of the Enterprise Europe Network.

Chris Vassallo Cesareo was elected President of The Malta Chamber at the end of March, after serving on its Council for 10 years. Here, he speaks to Rebecca Anastasi about his priorities for the next 2 years, and how he plans to continue bolstering the entity’s 175-year heritage.

In its 175-year  history,  The Malta Chamber of Commerce, Enterprise and Industry has grown to become the backbone of private-public business relations.    Indeed, the organisation has proven instrumental in ensuring that the Maltese corporate community, as well as its strong industrial sectors – manufacturing, retailing and service providers – flourish, weathering the storms determined by the economy.”

In March, businessman Chris Vassallo Cesareo, whose CV includes a 10-year stint on The Malta Chamber’s Council, and an established career as Managing Director at Domestica, one of Malta’s leading furniture establishments, was elected President for a two-year term.

“My background is in the small-to-medium business sector, with Domestica being a second-generation family business, possessing investments in retail, manufacturing and servicing, so I’m very aware and conscious of the challenges and opportunities facing similar businesses working within these economic pillars – which, actually, include most of The Malta Chamber members. The fact that I’ve also been working on the Council, and working closely with the entity’s former presidents, means that I can also follow in their good footsteps,” he smiles.

Indeed, his key priority is to more firmly entrench the deep roots already established by The Malta Chamber, which, Mr Vassallo Cesareo says, is fundamentally dependent on the work of those starting out their careers. “My intended focus is on the future generations of business leaders,” he continues, adding that he’s also the Chairperson of JA Malta Foundation, which provides training and mentorship to entrepreneurial youths. “It’s our responsibility to give a platform and the space to future generations to excel in their respective areas,” he insists.

This is done through the commitment to The Malta Chamber’s five pillars: economic growth and resilience; environmental sustainability; digitalisation and infrastructure; human capital; and good governance. “We champion these foundations, to make sure we continue to leave a legacy,” he says, explaining that integral to these principles is education. “I don’t believe we can afford to separate education from industry. The Malta Chamber can help create the future, bringing educational institutions in touch with local businesses so we open the doors of opportunity, with youths being able to establish a career, and not simply look for a job. We are looking at things holistically, and this is tied to a national vision for the country,” he says.

Good governance will be another of Mr Vassallo Cesareo’s core priorities during his tenure. “Once you have this in place, then you can be competitive. It comes naturally. We have written a document giving recommendations on how to strengthen Parliament, and another on how to establish better procedures for public procurement.  Through these, what we’re saying is that we, as businesspeople, are also looking out to ensure the work is done correctly. For instance, if companies are not in line with the law, they shouldn’t be awarded public tenders.””

Trust is a two-way street, he says. “It’s our duty to raise these issues, since it creates a healthier economy which is more conducive to conducting correct business. To be more specific, if a tendering process has been launched and company A, that has done everything well, and paid all its dues, is competing with company B, that has not paid its taxes, then this is an unfair advantage, since the latter will have more cashflow, for a start.”

Concurrently, The Malta Chamber is also suggesting a lobby register – a proposal which has been put forward to Government over the past few years – in which meetings with public officials will be declared within 24 hours after the meeting is held, with the minutes uploaded on a public forum, so “they can be read and debated. They should be available to the public,” Mr Vassallo Cesareo says, pointing out that “the proposals being made by The Malta Chamber are always tangible, structured and concrete recommendations,” and therefore, workable.

This approach is crucial if The Malta Chamber is to fulfil its mission of championing the interests of the islands’ economic sectors and lobbying the authorities to ensure the best possible economic, social and political environment for businesses to flourish. “We are aligned to these five pillars, but we are also finding new priorities, new pillars. Our job never stops,” Mr Vassallo Cesareo attests.

Indeed, in the foreseeable future, The Malta Chamber will be focusing attention on the challenges associated with recruitment and human resources; the ease of doing business in Malta; access to finance and cashflow; helping to resolve the kinks in the supply chain; and the issue of Government competing with the private sector.

Moreover, The Malta  Chamber  is  keen  to  aid  businesses capitalise on the opportunities offered by technology, including by partnering up with Tech.mt, a Government entity launched to help tech companies export their digital offerings. “With this partnership, we represent the private sector, and we encourage firms to internationalise their products and services,” he says, adding that all local enterprises should be cognisant of the opportunities inherent in using digital solutions to also do business away from Malta’s shores.

“We are involved in several projects such as DS4Air, which has now ended, but its goal was to help companies become more tech-oriented. And there are other such initiatives in the pipeline, through which we give free services to our members, in order to help them expand,”” he continues.

Rising inflation has also been of concern to local businesses and, as a result, to The Malta Chamber. “At the moment, inflation is at a 3.61 per cent increase, averaging at 3.55 per cent, so this has been of major concern to private enterprises, irrespective of their size, turnover or sector. In fact, we’re being asked for clarity on how this will be resolved moving forward. We know, for instance, that Government has been absorbing the increasing costs of energy, but what’s going to happen when these subsidies stop?”

In his view, “Government must see how it is going to ease the way for local businesses in this regard, and I’m sure if we handle rising inflation correctly, we can navigate it. We don’t want the Government to be handing out money to everyone, for instance – but to those who really need it to survive. And once again, if a particular business has not paid its taxes, it should not be eligible for Government aid. Therefore, our solutions are very much linked to good governance and the associated competitiveness,” The Malta Chamber President says.

Looking ahead, Mr Vassallo Cesareo insists that the future is bright. “We’re celebrating 175 years of being in operation, and we still stand for the ethical voice of business in Malta. We champion policies and represent good business, and correct business. We have a strong stake, and there’s a firm direction, which can give the local business sector courage and strength to navigate what comes our way,” he concludes.

This article was first published in the Business Now 2023 magazine.