Services in general are becoming increasingly dominant in the economic activities of developed countries, making the liberalisation of services a necessity. The commercial market for financial services is huge and due to the fact that many have realised the immense potential that lies within this industry, financial services are growing in many economies around the globe.

Modern, state-of-the-art information technology services are critical to improving productivity and maintaining the competitiveness of our industries and economy. Importantly, these capabilities are not geographically constrained nor do they depend heavily on the availability of natural resources but depend upon human resources, education, intellectual capital and electronic infrastructure. Hence, it is vital for us to invest in our education system which stimulates skilled human resources, and in the development of electronic infrastructure which enables us to partake in the benefits of the knowledge economy.

Government’s support for the services industry is consistent with its long-standing support for open trade and investment. Freer trade in services enables countries to enjoy the benefits of globalisation, and improves economic efficiency just as freer trade in goods does. It contributes to job creation, higher incomes, more consumer choice, downward pressure on inflation and a better quality of life. The importation of services and foreign investment in financial services stimulates the competition that improves the efficiency of domestic services industries. Moreover they add to the overall availability of services and to the variety from which individual and corporate consumers can choose.

Liberalisation of trade was an important means to encourage the continued rapid expansion of foreign direct investment. One must point out, however, that this was not always the case in Malta as whenever liberalisation took place in various sectors in the past years this was always resisted by some of the players in the particular sector and by certain political quarters. While it is a fact that within the manufacturing sector, primarily due to cheap labour costs, Europe is encountering stiff competition from the Far East, Malta’s competitiveness within the services sector has been maintained. This is to a large extent dependent on our trained workforce, which can offer excellent services at a competitive price.

Financial services, in particular, have grown significantly and come a long way, becoming an important pillar for the Maltese economy. While further developing the concept of offering a sterling service at competitive rates, the government will continue to evaluate and update relevant legislations and regulations for Malta to retain its competitiveness in this sector.

Through strategic decisions taken by the government and the private sector, Malta has obtained international recognition as a stable financial services centre of repute. Our efforts have been rewarded and there are now over 6,000 people employed in the financial services sector (excluding law firms and accountancy firms). This means that the financial services contribution to the GDP is a significant 12 per cent.

Malta’s success in this sector has to be further enhanced and in fact the Competitiveness and Communications Ministry, through the Malta Standards Authority (MSA), is encouraging the services sector, such as financial operators, to certify and implement standards within their structures as these would result in improving competitiveness by guaranteeing optimum work practices to customers.

The MSA helps industry and economic players to become knowledgeable and compliant to internationally recognised standards, such as the ISO 9000 Quality Management Services, certifying acceptable quality standards to customers in the services sector.

Through EU membership Maltese operators have access to a market of over 400 million consumers, therefore strengthening the potential for international service providers to operate from Malta, whilst giving an added value to domestic ones.

Malta’s sound and modern telecommunications infrastructure complimented by its highly trained human resources underpins the Malta Financial Services Authority’s strategy in promoting Malta as a potential regional hub within the sector.

Undoubtedly, a well-developed infrastructure supports economic activity. Over the past 15 years the government has considerably invested in our physical infrastructure: In energy generation and distribution, water treatment and production, maritime developments, connecting sea and air routes and telecommunications, to mention a few.

All policy measures, both in financial services and in all sectors of the economy, have to take stock of our human resources potential and the track record of the Maltese industry as a successful global player. Liberalisation and enhanced competition have led us to greater efficiency, increasing not only consumer benefits but are also providing a stimulus for growth within the business community.

I believe that within today’s globalised environment we cannot rest on our laurels but must ensure that the success we have in the financial services is maintained and possibly bettered. In fact I believe that there is still much room for this sector to expand. With our experience in this field I am optimistic that attracting new business such as the setting up of back office operations for large international financial services institutions is very much within our reach. I trust that the excellent entrepreneurial spirit which exists within this sector will ensure that we can use today’s globalised environment to our advantage and attract new business in financial services to our shores.

Censu Galea is Competitiveness and Communications Minister