The Ministry for Finance has identified investments related to the generation of renewable energy and digital as new economic niches for Malta to target as it seeks to exploit the “disproportionately positive effect” the country can have in these sectors.
The pre-Budget consultation document, released on Monday, makes it amply clear that the European Union’s digital and green agendas must be incorporated into Malta’s future economic planning.
It points out that investment and support is “pouring” into the sectors that can help achieve these priorities, and that this vision is in line with that of policymakers across Europe, who view technology and renewable energy as the pillars upon which the innovation of the future can be derived.
Therefore, Malta needs to quickly build up a foundation to be able to benefit from the anticipated investment flows.
“The Maltese economy,” it says, “especially the private sector, needs to absorb the raison d’etre of these agendas because they will profoundly affect the Maltese and Gozitan lives and the attractiveness of Malta’s economic model.”
This shift in mindset expected of the private sector will be backed by Government’s focus on driving public policy and investment towards attracting digital and renewable energy investments into Malta, with the document making it clear that scholarships, business support schemes and incentives will be prioritised towards these key areas.
With the wage supplement winding down and more emphasis being placed on restructuring, some businesses might now start thinking of how to pivot their resources.
Addressing the renewable energy sector in particular, the document notes that the appetite for foreign direct investment in these areas is there, with the International Energy Agency setting expectation for a rebound in global energy investments following the COVID-19 pandemic.
“The technology surrounding wind, hydro and solar – all areas in which Malta can have a disproportionately positive effect – is improving exponentially and will soon be at a level where the value they bring will be substantially better than the status quo,” it said.
“This is the right time for policymakers and businesses to invest time and resources in these areas, as market leaders will soon start to emerge and establish themselves in a more permanent manner.”
The document also points out that France, the UK, Germany and especially Italy are putting “a considerable political, economic, and financial focus on renewables”, viewing the technologies and digital innovation paired with them as a possible permanent edge on other less innovative economies.
Ultimately, the Ministry for Finance believes there is “plenty to be optimistic about on what is around the corner” as the effects of Malta’s insularity are decreased.
It explains that the strategy does not just bring direct positive outcomes, but also creates indirect but just as important results, such as cleaner air, less pollution, increased efficiency, and a more digital and modern society.
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