Following an exhaustive consultation process for the drawing up of Malta’s National Reform programme, we are now half way through in the implementation stage of this plan and our efforts are starting to deliver.

The Malta NRP is an integrated, ambitious programme comprising policy objectives, and a comprehensive strategy that constitutes a strong appropriate response to the main challenges facing Malta. Primarily the proposed strategy in our NRP aims to:

·address fiscal sustainability;

·limit the role of the government in the economy and to stimulate the private sector to improve further national competitiveness;

·aise general educational levels and higher participation rates in training and lifelong learning;

·improve employment, the adaptability of workers and flexibility of enterprises; and

·upgrade the country's environment.

Malta attaches great importance to securing its increased competitiveness. However, we understand that Malta's competitive edge does not lie solely in the development of its hard infrastructure, but significantly in the development of its human resources.

The government agrees that we need to put as much emphasis as possible on competition issues and the quality of our regulatory system. Various measures mentioned in the NRP were included in the last two budget programmes, including further liberalisation in various sectors, and port reform among others. Malta's island geography makes the use of seaways as the most promising link towards Malta's contribution to transnational cooperation and for our economic growth.

The government believes that it is through the five main priorities listed in the NRP that Malta’s competitiveness can be boosted with a consequent increase in employment opportunities for all. We have to bear in mind that the implementation of Malta’s NRP spans a period of three years and consequently we have only reached the half term mark. Malta has, as of October 2006, submitted its first annual report to which the Commission has reacted favourably.

We are pleased to note that the Commission has acknowledged Malta’s efforts and considers very favourably the methodology that has been adopted. It also recognised that Malta is making good progress in the NRP’s implementation. The Commission has singled out in particular Malta’s performance in the sustainability of public finances, the environment and education pillars. In this respect it is pertinent to list some of our NRP achievements within the various pillars.

With regards to the sustainability of public finances, the government has moved fast to reform and sustain the pensions system and has moved legislation in Parliament to this effect. We have continued to reduce the deficit to GDP ratio in order to achieve the convergence criteria. The government is also making a more efficient use of human resources.

With regards to the environment, government has among others protected by law almost all of the Maltese species of international importance, developed a green public procurement plan, started a rehabilitation process of former dump sites, methane recovery at landfill sites and is pushing forward the process for treating all sewage prior to disposal at sea.

With regard to education, we are currently in the process of networking schools into colleges in order to provide streamlined educational profiles. A policy document on early childhood education has been formulated, in which a higher percentage of students are completing higher secondary education, and a National Commission for Higher Education has been set up. There is a marked increase in the number of students who are continuing their post secondary education.

Within the competitiveness and employment pillars we have ensured that the gas and petroleum operations are divested. We are continuing with our efforts to promote our SMEs, and as I already mentioned, we are committed towards port reform. Cargo handling operations at the Valletta Harbour have been sorted out. This has already brought about an increase of about 20 per cent in the amount of cargo handled at Valletta. Talks with the various port worker groups are now at an advanced stage.

This is by no means an easy process especially when some parties involved, who have long been calling for port reform, oppose the process when it affects them in a way that is not according to their expectations. It is more important to complete this process in a way that once it is concluded our true objectives would have been met rather than concluding the process hastily and obtaining half-baked results.

In the tourism sector there are also the first signs that various measures that have been taken seem to be bearing fruit. Low cost carriers are flying regularly to Malta with initial results showing that they have somewhat helped in increasing competitiveness in the tourism sector.

Better regulation principles are also being adopted with the launch of an action plan on simplification which consists in the removal of administrative or fiscal burdens on over 100 measures. Other initiatives to boost our competitiveness include:

·A government scholarship to boost our R&D potential;

·The setting up of Malta’s own research and innovation strategy;

· Consolidating our strength in the ICT sectors;

· An energy policy focusing on efficiency;

· The drawing up of a strategy for renewable energy;

· Allowing part-time workers to benefit from a more equitable tax and social security regime;

· The introduction of family friendly measures;

· Training services for adults;

· And various schemes by ETC for those seeking employment.

These various initiatives do not usually hit the headlines but together they bring about a positive swell of change to our economy. This is not to say that the government is resting on its laurels. On the contrary we recognise the challenges that lie ahead in terms of implementing those areas of the NRP where we are in a disadvantaged position.

In particular we recognise the need to:

·Ensure that investment in research and development is enhanced. The government is seeking to introduce incentives but it needs to be realised that R&D is not solely a government domain. On the contrary EU targets indicate that the private sector should invest more than the government does;

·Explore methods on how to achieve a better stability of energy supply. In fact proposals for interconnectivity to the European grid are being requested at this point in time;

·Explore the situation regarding competition within the professional services;

·Further commit ourselves towards higher renewable energy targets;

·Foster more female participation in the workforce;

·Curb undeclared work with a view to increasing labour supply;

·Reduce the number of early school leavers and to further increase the population’s level of educational attainment of our population.

All this needs to be rolled out in the next 18 months. This is far from an easy ride. This is one major task of the Competitiveness and Communications Ministry which has the challenging task to coordinate with other Ministries to achieve the objectives set out in the National Reform Programme. It is a question of ensuring that all hands are on deck and that Government and the private sector contribute together in order to achieve these objectives. None of these interested parties can do it alone and the benefits created by one are often enjoyed by the other.

I strongly urge all private stakeholder organisations to liaise with us and to come forward with their views so that we can take stock and prepare joint actions for the realisation of our national objectives. The targets set in 2006 could not be achieved without the full participation and commitment of all those involved. I am sure that the spirit of collaboration and goodwill will prevail to help us achieve our goals.

Censu Galea is Competitiveness and Communications Minister