Embracing Change

Transitioning the economy to fit the vision¸ however¸ was not always easy¸ especially post 2001. Privatisation of many government enterprises¸ radical restructuring of state-owned companies¸ tight control on government expenditure¸ higher effective taxation and a stringent tax compliance regime¸ all measures aimed at reducing the country’s deficit and establishing a stable fiscal platform for the island’s economy¸ also caused various problematic economic reverberations. At the same time¸ the strategic decision to move away from low-cost manufacturing and package tourism that drove the island’s economy up to as recently as ten years ago caused even further economic jitters as the island struggled to cope with the resultant loss of jobs in the manufacturing sector as large employers scaled down or even closed concurrent with a relative slowdown in tourism as operators struggled to adapt changing realities within the international market.

However¸ over the last couple of years Malta has been seeing the hard-won results of these policies. New industry sectors¸ knowledge-based activities that barely even existed two decades ago¸ such as ICTs¸ iGaming¸ aviation services and financial services¸ are now jostling the shoulders of the upgraded traditional leading sectors of tourism and manufacturing as they compete for the title of fastest growing sector. Forty years on¸ Malta has identified the economic strategies that will work it¸ and today the island enjoys a stable economy which is flexible and responsive¸ and¸ according to the island’s government¸ able to counter the challenges of the current international recession.